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Newsletter
We discussed in last week's message that the recession countdown started, and if that is the case, forward earnings remain at risk. Such has implications for investors as valuations remain elevated.
Consumer staple companies typically include companies that sell essential goods. As such, earnings growth tends to be limited but reliable, even during a recession. Proctor Gamble, the maker of many household items we use daily, is the most significant contributor to the sector. Conversely, discretionary stocks sell non-essential goods. Amazon and Tesla make up a […]
Newsletter
As the recession countdown begins, the market finally took notice of rising yields and the continued talk of higher rates. In last week's message, we discussed that while the bulls were betting on a "no recession" scenario, the market was beginning to question that bet, and a deeper sell-off was coming.
Newsletter
In last week's message, we discussed the bulls were ignoring the Fed's continued hawkish stance on monetary policy. We were also concerned that the correction had likely started in the short term as our MACD sell signal had triggered.
The hot January CPI report bolsters the Fed’s view that inflation will not fall as rapidly as they prefer. Despite what may appear to be a slight setback, the downward trend remains intact. Year-over-year CPI is down seven consecutive months to the lowest level since October 2021. While the trend is assuring, January’s monthly data […]
Invest
U.S. Treasury Secretary Janet Yellen recently stated: “You don’t have a recession when you have the lowest unemployment rate in 53 years.” Let’s HOPE she is correct. As logical as her statement seems today, it may look equally foolish in short order. As we will explain, HOPE leads us to believe Yellen does not appreciate […]
Newsletter
In last week's message, we discussed the bullish signals the market was giving despite the Fed's continued hawkish stance on monetary policy. The commentary remains vital to this week's analysis as our primary short-term "sell" indicator has been triggered for the first time since early December. While that sell signal does NOT mean the market is about to crash, it does suggest that over the next couple of weeks to months, the market will likely consolidate or trade lower. Such is why we reduced our equity risk last week ahead of the Fed meeting.
Newsletter
Last week's message asked the question of whether the market's break above the long-running downtrend line was a "head fake?" The market surge continued last week but ran into resistance on Friday as markets are pushing well into 3-standard deviations above the 50-DMA. However, while the weakness on Friday was not unexpected, it is also necessary to determine whether the current breakout is legitimate.
Newsletter
The upcoming FOMC meeting will likely determine the market's direction over the next few weeks. While many market participants are hoping for a "kinder, gentler Fed," As noted previously, the recent commentary suggests such may not be the case.