12:00 TUESDAY – Weekly Stock Market Report #214 – 7/5/23
by Robert Holman | www.DefensiveAdvisor.com
WEEKLY STOCK MARKET REPORT … 5.0 (1-4 bearish, 5 neutral, 6-9 bullish). No change. Inflation appears to be slowly receding but is still significantly above the Fed target of 2.0%. The biggest surprise this year - economic data does not point to recession (yet).
Most market observers believe that until inflation drops to a “3-handle” (meaning < 4.00%) (currently, Headline CPI is 4.0% and Core CPI is 5.3%) the market may not be able to give us a sustained rally. In the first quarter, consumer spending kept GDP from falling. Data for second quarter GDP will not be available until the last week of July.
In addition, some think the healthy labor market hasn’t caused much inflation, so the worry is that a continued tight labor market could set off further inflationary increases in the months to come.
Despite all this, in the first half of the year, the market recovered lost ground, even while the Fed continued raising interest rates. This is a very surprising result and accordingly, there is great debate as to whether this is a bull market rally or a strong bear market bounce.
Treasury yields have risen almost 20bp in the last week.
Please be cautious and careful when investing in AI (Artificial Intelligence) where aggressive buying has created a bit of an AI bubble. It’s hard for any one firm to dominate early stages of growth, because innovation occurs rapidly, but the larger companies like NVDA, MSFT, and GOOGL ave substantial excess cash to finance a leadership position.
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 improve 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.
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.
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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.