12:00 TUESDAY – Stock Market Report #206 – 5/2/23
by Robert Holman | www.DefensiveAdvisor.com
STOCK MARKET RATING … 3.5 (0-4 bearish, 5 neutral, 6-10 bullish).
Up 500 points, then down 500 points – a lot of volatility going nowhere. The Federal Reserve interest rate decision is due on Wednesday, May 3rd. What the chairman says in his news conference will be key to what the market does in the short-term. If the Fed pauses rate hikes and gives no indication about future rates, we will probably rally. If the Fed says they will keep raising rates because inflation is not declining enough, then we will head down.
A lot of attention is being paid to corporate profits. It’s hard to tell if investor focus has shifted to the business cycle and recession, or if it’s just scrutiny derived from earnings reports. We may be at the point in time where the impact on business profits from the rate hikes, and the economy, will become our primary concern rather than interest rates.
It is my view that The Fed WILL have to raise rates even further. This will surprise many investors. As that view becomes more widely recognized, the market will resume it’s downward drift. Inflation does not come down overnight; that’s not the way things work.
Just a short note on my investment philosophy --- I try to ADJUST RISK to CURRENT TRENDS (risk on versus risk off) - that’s a significant difference from market timing. It’s the process of thinking and playing defense.
PORTFOLIOS … After reading this report, if you are unsure how to position your portfolio to take advantage of these conditions, call me to discuss your circumstances, I’ll do a complimentary portfolio evaluation, and I’ll explain what ought to be done to help your situation. If you want to get started right now, just click here and input your portfolio holdings and I’ll call you.
TO MY CLIENTS … THANK YOU FOR YOUR TRUST. We’ve had great success since we started this RIA in mid-2018 and are doing better than the market return since that time period.
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Excelsior Divitiae. Learn from the Bible: Deuteronomy 10:14 and Psalm 24:1 (taken together), Genesis 12:2-3, Proverbs 15:22, 21:5, 22:3 and 27:12, Ecclesiastes 8:7, Joshua 1:9, Proverbs 3:5-6, Ephesians 1:17, Jeremiah 29:11, 1Chronicles 29:11-13, and 1 Chronicles 12:32. I recommend you read them in this order.
Published every Tuesday at 12:00 noon. For more information on my investment and planning services, or to sign-up for this weekly e-Newsletter, visit: www.defensiveadvisor.com/services OR www.defensiveadvisor.com/contact
Opinions in this post are for general information only and are not intended to provide specific advice to, or recommendations for any individual, without our complete knowledge of that individual’s total financial profile. No strategy assures success or protects against loss. Past performance does not guarantee future results.