As we anticipated on our last two postings, the market decided to take a breather, pulling out some profits and using the downgrading of the United States as an excuse. The current (and future outlook) status of the country caused Fitch Ratings to downgrade the US from AAA to AA.
This week’s market saw the S&P 500 close Friday at 4,478, down -2.23% for the week. The DJIA closed at 35,065, -1.11% by the week’s end. The NASDAQ closed at 13,909, down -2.85% and the Russell 2000, the index that tracks the Small Cap markets closed out the week at 1,057, -1.21% for the week.
The Inverted Yield Curve, which as our readers know, has been front and center in our sights as a signal for any clues on a recession now seems to be closing the gap between short-term and long-term rates. This tightening is a sign that we might – just might – dodge the bullet of a recession. The 2-year Treasury rate is currently 4.74%. 5-year is now 4.13% and the 10-year Treasury stands at 4.03%. We will, of course, keep you updated.
Most analysts are now in Bull territory, with some even suggesting that by year’s end the S&P 500 could reach 4,900. That is over 400 points higher than at present but a nearly 9 ½% jump. We’ll see.
Much of what remains to be seen is the direction – the trend as we call it – taking place in the Small Cap market. In order for the current market to continue its upward trend, Small Caps need to be a part of it. We’ll know more over the coming weeks when it comes to the small market, but our hunch is that we’ll soon see an upward breakout in this sector.
Investor confidence continues to hold steady. The Volatility Index (VIX) currently stands at 17.20 and although a bit higher than we’ve seen in the last few weeks, it is still showing investor confidence. When the VIX is below the number 20, investors are feeling good about the stock market.
As we’ve observed continually over these past months – good news can be bad - but bad news can be good! A case in point is the current job market. Openings for new jobs fell by over 30,000 (34,000 to be exact) and now stands at 9.5 million. This June number is the lowest number since April of 2021 and is indicating that the labor market is loosening its grip as a cause for inflation. There are currently 227,000 Americans filing for new benefits. 187,000 new jobs were created in July, but this is below market expectations, which was looking at 200,000. The job market is showing strength in health care, wholesale trade, finance-related industries, and social assistance. The current average hourly wages for non-farm jobs stand at $33.74.
When GaneWisdom/Market Edge went live in August 2022, the goal was to provide our subscribers top-tier market analysis and outlook to those with qualified accounts such as: IRAs, ROTH IRAs, 401Ks, and 403Bs. Our desire was to make this service affordable to anyone. Instead of paying thousands of dollars, or a percentage based on investment assets (which is how Guy managed his client’s money as a Registered Investment Advisor) GaneWisdom/Market Edge charges a very affordable $200 per year. Our subscribers now include those with non-qualified accounts as well as financial professionals. Our market analysis consists of market indicators, trends and strategies which allow our followers to avoid large losses usually associated with the traditional ‘Buy and Hold’ method. Our results speak for themselves and each of our Posts since our inauguration are available under the site’s heading ‘Archive’.
It is important to note that the following positions have been in place for weeks. Although we are not advocating transfers currently, it may NOT be in your best interest (should you be a new subscriber) to jump into these sectors at the present time due to price increases already realized. We suggest following our weekly market updates and Mid-Week Alerts for any new suggestions and moving into (or transfer out of) an investment at that time.
| Entry Date | Return (8/4/23) | |
| 1. S&P 500 loaded mutual fund or S&P 500 ETF | 5/19/23 | +9.8% |
| 2. A portfolio consisting of Financial Services. | 6/5/23 | +8.0% |
| 3. A portfolio consisting of Leisure goods and/or services. | 6/12/23 | +4.4% |
| 4. A portfolio consisting of Telecommunications. | 6/12/23 | +1.1% |
| 5. A Small Cap - loaded fund. | 7/12/23 | +1.6% |
Please watch for our Mid-week Market Alerts should there be any.
* As is the case with any investment, use your discretion and judgement before purchasing and/or transferring. Diversification is always prudent; therefore, our suggestion is using a portion of your portfolio and not the total in any one fund or subaccount. A portion should remain in Cash (Money Markets)
Mid-Week Market Alert for Thursday August 10th, 2023
Transfer 100% of your S&P 500 loaded mutual fund or S&P 500 ETF before the market close on August 10th, 2023 into a Cash (Money Market) position.
Mid-Week Market Alert for 8/11/23
Transfer 100% of your portfolio consisting of Leisure goods and/or services into a Cash (Money Market) position before the market close on Friday, August 11th, 2023
