Janet Yellen, the Treasury Secretary has been sounding optimistic that the country will avoid a recession to the strong U.S. labor market. During a Bloomberg TV interview earlier in the week, Yellen opined that the S&P 500 could see heading between 4,800 and 5,400. The index currently stands at 4,536. “I don’t expect a recession,” said Yellen, “I think we’re on a good path to brining inflation down…..the most recent inflation data were quite encouraging….I think we’re on a good path in the United States.”
Still, the fly swimming in the coffee remains the US Treasuries. The current 2-year Treasury stands at 4.84%. 5-year at 4.09% and the 10-year at 3.83%. That Inverted Yield curve continues to bother us.
These last weeks have witnessed a true bull run in the stock markets. You’ll recall our prognoses over the past months (see ‘Archives’) that should the S&P 500 drop to 3,300 give-or-take, a Panic Bottom would ensue. This would be the time when investors would throw in the towel and dump their holdings. We also observed that if the S&P 500 were to hit-and remain above-4,300 that the Bear market of 2022 would officially come to an end. Happily, we saw the S&P 500 index hit 4,300 and now we are 200 points beyond that number.
The housing market has turned up the heat and ironically one reason is the absence of homes for sale. It seems this absence of available homes is causing homebuilders to work overtime. Existing home sales fell 3.3%.
The numbers for new unemployment filings fell by over 9,000, a good sign for inflation as we’ve outlined previously but still a tight labor market abounds.
This week the S&P 500 closed at 4,536, up 0.69% by weeks end. The Dow Jones closed Friday at 35,227 with a week’s gain of 2.08%. The NASDAQ closed at 14,032 down 0.57% for the week and the Russell 2,000 (which measures the Small Cap market) closed Friday at 1,960, +1.51% by week’s end.
We are closely watching the Small Cap market, which is currently at what’s called its ‘Resistance’ level. In simple terms, this means that it is nearing its top. Should it break through this ‘top’ the index should continue its upward climb. If it does not, the index will decline or stay in a holding, or sideways, pattern. If for some reason the Small Cap markets don’t move beyond this current resistance level, the markets could have some problems moving forward. While we will continue to monitor this sector, we are of the opinion that Small Caps will eventually move past this resistance level.
Despite the upward trend these past weeks we’ve seen in the stock market, we are in what’s known as an ‘Overbought’ position. This means that we may see profit taking over the next days and weeks. This DOES NOT mean that this rally is over, but that we could see a consolidation of positions ahead. Be assured that ss a subscriber, you will know where things are standing at any particular time.
We expect to see the Federal Reserve raise interest rates at their meeting this week by ¼ point. This may cause a bit of angst with investors so be prepared for such.
We remain optimistic despite the Market Correction we see coming shortly.
Our original goal in offering the market outlooks found over these past eleven months on GaneWisdom/Market Edge was to provide investment advice to those with IRAs, ROTH IRAs, 401Ks, and 403Bs at 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.
Below are those results as well as our current market positions:
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 move into (or transfer out of) an investment at that time.
| Entry Date | Return (7/21/23) | |
| 1. S&P 500 loaded mutual fund or S&P 500 ETF | 5/19/23 | +12.1% |
| 2. A portfolio consisting of Financial Services. | 6/5/23 | +9.9% |
| 3. A portfolio consisting of Leisure goods and/or services. | 6/12/23 | +6.2% |
| 4. A portfolio consisting of Telecommunications. | 6/12/23 | +1.6% |
| 5. A Small Cap - loaded fund. | 7/12/23 | +2.00% |
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)
