Market Update
Market Edge

Market Update for the Week of June 10th, 2024

The New York Stock Exchange from the steps of Federal Hall

How can anyone predict the market? How can an investor possibly know when to be in the market or be on the sidelines? The answer to both of these questions is – you can’t!

Over and over in these pages you’ve read that good news can be bad news at times and once again we saw this play out this week. The U.S. economy is moving ahead and not just in theory. 272,000 jobs were in May. This figure was much higher than the 165,000 added in April but much above what economists had forecasted. The markets turned in a zigzag week because of this. Additionally, the unemployment rate jumped up to 4% which is the highest since January of 2022. Workers saw their wages increase 0.4% which was twice the increase in April.

There has been the off again/on again discussion concerning the direction the Federal Reserve and investors are left in a quandary as to what to do which is why GaneWisdom/Market Edge has continued to increase its readership. Too many investors turn to their emotions to make investment decisions, while other investors await direction from the financial advisor which may or not be forthcoming. The benefit offered on these pages – knowing when and where to position (or reposition) their portfolio cannot be overstated. We invite you to review our past posts (found in the Archive section) and judge for yourself.

In the meantime, let’s look at the week just passed.

S&P 500 (stockcharts.com)

Closing at 5,346 Friday, the S&P 500 was positive for the week up 1.32% and the for the month 3.07%.

Dow Jones Industrial Average (stockcharts.com)

This week the Dow gained fractionally 0.29% and for the past month 0.22%. Friday saw the Dow close at 38,798

NASDAQ (stockcharts.com)

The Nasdaq continues to shine, closing at 17,133 Friday and for the week up 2.38% as well as +4.90% for the month.

Russell 2000 (stockcharts.com)

Using the Rydex Russell 2000 chart above because of the ongoing situation between Stock Charts and the reporting agency, the Russell 2000 closed Friday at 2,026, down 1.85% for the month.

2 – Year Treasury (stockcharts.com)

Two-year Treasuries closed at 4.89%. 5-year Treasury Bonds closed at 4.46% Friday and the 10-year at 4.43%

Volatility Index (stockcharts.com)

Investors continue to feel comfortable in the market direction closing Friday at 12.22. You’ll recall that anything above 20 shows concern, 30 and above fear and 40 and above a full blown panic. Steady as she goes…….

30 – Year Mortgages (stockcharts.com)

The national rate of a 30-year fixed mortgage stood at 6.99% Friday. Applications for new mortgages slipped down in the last week of Maybe 5.2%. The previous week saw a decline of 5.7%. This from data collected by the MBA. So long as the Treasury bonds remain high, we will see these higher mortgage rates.

West Texas Intermediate Crude Oil (stockcharts.com)

Friday saw West Texas Intermediate Oil close at $75.53/barrel, down nearly $2.00/barrel in the last several weeks. This week we should expect gas prices to remain at about the same level as this past week. Look for a variance between $73.00 and $78.00/barrel in the upcoming week.

The Board of Governors of the Federal Reserve

Commentary

Stocks took a bit of a hit on Friday due to the stronger-than-expected jobs date which pointed to a strong economy which translated to a longer wait for interest rate reductions for investors.

Early in the week investors were becoming comfortable with the idea that the Fed would begin lowering rates as early as September but once reality sunk in, the market took a dive – especially from the communication, utilities and materials sectors.

The Small Cap markets are beginning to worry me. As you know I always consider the Small Cap market as the Canary in the Coal Mine, and we are seeing less and less strength from this important sector. Bond yields continue to increase and that is putting a lot of pressure on Small Caps as well.

We may possibly garner an idea about rates this coming week when the Federal Reserve holds its two-day policy meeting beginning on Tuesday (6/11). Inflation data will also be announced this week as well. If the Fed opens the door even slightly about a rate reduction in September, the markets will see a strong uptrend.

Regardless of what transpires this week or the weeks ahead you can be assured we will be closely monitoring the movements and will notify you immediately (as we did earlier this week) of any changes.

Have a blessed and prosperous week………

Guy W. Gane, Jr.

From Market Update for January 1st, 2024 -

“…….As you know, our investment philosophy follows the guidelines used by Guy Gane when he managed many millions of dollars for many thousands of clients. His results placed him among the premier Registered Investment Advisors in the United States for many years.

Periodically we are asked “How are subscribers to GaneWisdom/Market Edge able to enjoy profits without losing money?” The answer is – they don’t! No-one can accurately know when a market top happens, nor when a market bottom will occur. Our philosophy is to take small losses in order to avoid big losses.

Let’s analyze the stock market for the last two years – 2022 and 2023.

2023 has witnessed an extraordinary runup in the S&P 500 (+24%), the Dow Jones (+13%), the Russell 2000 (+17%) and the most impressive – the Nasdaq (+43%).

If you are participating in your company’s 401k or 403b, you most likely have no one giving you guidance as to what to buy, when to transfer or when to sell. Consequently, you probably just leave the money, and continue to deposit into whatever funds you originally started with. Most Financial professionals advise their clients to ‘Buy and Hold’ their investments because ‘the market always comes back, then goes up!’ Sounds logical as well as sounds good! It’s hard to argue that logic, especially this year when the market did indeed ‘Come back’. But is that the end of the story? Not by a country mile……

Had your portfolio been invested in tech stocks, the Nasdaq let’s say, and you just kept the money there because your advisor said that’s the ‘smart move’, 2022 saw your investment lose 33% of its value (the Nasdaq’s performance in 2022). Your $10,000 investment by December 2022 was now worth $6,700.00. But the market came back – up 43% as we’ve seen. Despite this – YOU STILL LOST MONEY!

Why? Let’s look……

$6,700  x 43% = $2,881

$6,700 + $2,881 = $9,581 !

In order to break even – JUST TO BREAK EVEN – the Nasdaq would have had to increase 49.3% !! You still lost money 2023!

As you can read in our Archive section, we have given sound financial guidance throughout the last 16 months which could have minimized these losses and maximized gains.

This dear reader, is the visual result of Buying and Holding……”

Upon Reflection

When we began publishing GaneWisdom/Market Watch on August 21st, 2022, the Dow on the previous business day (8/19/22) stood at 33,706. The S&P 500 ended trading on the same day at 4,228. As we wrote above, Friday’s close for the Dow Jones was 38798. The S&P 500 at 5,346.

Having to give back profits, then having to make them back up instead of profiting by building on profits is not the way to win on Wall Street. This is the ‘Buy and Hold’ strategy. Realistically this is the ‘Buy and Hope’ theory.                                                                                                     

Our subscribers have averaged meaningful positive returns and by following our column exited the markets and re-entered them when appropriate – while the Buy and Hold crowd hung on with white knuckles hoping the market would come back and make up what they lost. The current market had trading opportunities which we had taken advantage of. We’ve been publishing GaneWisdom/Market Edge for these past twenty-two months with a high degree of sagacity (please refer to the “Archive” Section of our site). We are listing our current positions below. Our market strategy has been taking advantage of upward trends, the advantage being not having to make up for the large losses that can (often) occur in the Buy and Hold strategy. When (not if) the market shifts again, we will issue our analysis, guidance and suggestions at that time.

Our Commitment

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’.

In Conclusion

As a subscriber to GaneWisdom/Market Edge you are being given unequalled access to the latest and most comprehensive market analysis available. Please note the following and move accordingly. We strongly caution moving into an equity position in the middle of an upward market, as we are still in right now. This could lead to severe losses – ‘Buying high, selling low’ – is not wise. Please watch for our Mid-Week Market Alerts in the event of shifting market conditions.

Wishing, hoping, If only’s and what if’s are based on emotion and you know that we follow the numbers, the indexes, the trend, the fundamentals - not emotions.

Our current positions:
(As of 6/7/24)

We currently are/or were positioned in the following:           EnteredExit Profit/Loss
A portfolio consisting primarily of Consumer Products5/3/24 5/31/24 +0.2%
A portfolio consisting primarily of Banking stocks  5/3/245/31/24+0.1%
A portfolio consisting primarily of Small Cap (Russell 2000) stocks  5/7/24  6/5/24-0.2%
A portfolio consisting primarily of Nasdaq traded stocks        5/8/24open+5.1%
A portfolio consisting primarily of Large Cap (S&P 500) stocks  5/8/24open+4.5%

Your particular Mutual Funds and/or Variable Annuities may or may not offer all or any of the positions we recommend from time to time. You MUST do your homework. Doing so and finding the portfolio in accordance with the our analysis may position you to take advantage of what we believe to be the next market rally or opportunity.

* 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)

Please watch for our Mid-week Market Alerts should there be any

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