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.
What a week. What a quarter……..
Two terms you have possibly heard previously, but which you will read today, are: Bull and Bear.
In stock market lingo, when someone exclaims that we are in a Bull Market, they mean that the market is going up. Bulls charge forward as we know. A Bear market occurs when stocks retreat. The Bear hibernates – retreats – to his cave in the winter. The market had a rough third quarter, which (thankfully) ended on Friday and both the S&P 500 and the NASDAQ posted their biggest monthly percentage drops of 2023 while all three major indexes posted their first quarterly decline of the year. The Dow Jones ended trading Friday at 33,507, down 1.34% for the week and down 2.6% for the quarter. The S&P 500 ended at 4,288 Friday down for the week .07% and down 3.6% for the 3rd quarter. The NASDAQ fell to 13,219 Friday but surprisingly up 0.06% for the week however took it in the chin for the quarter, down 4.1%. The Russell 2000 closed out the week at 1,785 up 0.48% for the week but down 5.49% for the quarter.
The S&P 500 Index (stockcharts.com)
*Note that the S&P 500 is now trading below it’s 50-day Moving Average (MA). This is considered a ‘Bearish’ sign. Should the index fall below it’s 200-day MA a continued period of market anxiety can be expected.
Fear is the name of the game on Wall Street now. Although these government shutdowns are as common as apples on the tree in the fall, investors were worried in the extreme about this one. The political climate in the country is becoming (has become?) toxic. No longer can someone express their opinion to another, let alone in public. Compromise on any level seems to be non-existent – now sadly even between family and friends. We are fed multiple daily doses of negativity and if there is anyone who doubts that it is influencing nearly everything in the life of the ‘average’ American we truly would be interested in hearing that viewpoint.
Fortunately, a shutdown was averted on Saturday (9/30/23) as Congress kicked the can down the street until November when we can all rehash, revisit and re-worry. Sadly, data is pointing that Americans haven’t been this concerned about the economy since March 15th when Silicon Vally Bank collapsed sending the banking world into a tither.
Over these past months you’ve had the opportunity on this site to view the Volatility Index (VIX) which is known as ‘the Fear Index’ concerning the attitude of the investing public. Wednesday CNN announced that their gauge known as the Extreme Fear Indicator reflected the kind of fear not seen since the spring when the above-mentioned bank collapse happened. The VIX closed Friday at 17.52. Keep in mind that any number below 20 shows little concern among investors about the market’s future, however the index is moving up as just a few weeks ago we were between 13 and 14. Anything over the number 20 shows concern, above 30 is real concern and at 40 or above investors are heading out the door quicker than someone yelling ‘fire’ in a crowded theater.
The Volatility Index (stockcharts.com)
*Note that this chart follows along the outlook the investing public perceived the stock market to be in at any particular time. The higher the anxiety, the higher the upward movement on the chart.
Some feel the country is in for a recession and the Treasury market seems to continue to signal it. 2-year Treasuries are currently 5.04%. 5-year Treasuries re 4.61% and 10-year Treasuries stand at 4.57. That darn Yield Curve just doesn’t seem to want to go away……..
2-year Treasury Bond (stockcharts.com)
*Note the precipitous climb in the yield on this short-term investment since the spring – not an auspicious sign toward avoiding a recession.
Oil continues to inch toward the $100/bbl. level ending the day Friday at $90.79. The pressure of not having an increase in output is certainly having an effect on the energy market. There are a few in the industry talking about $120 to $150 per barrel if output is not increased.
The following chart measures the West Texas Intermediate oil price (stockcharts.com)
*Note the upward trend of oil prices since early summer.
The current average 30-mortgage rate is 7.75%. 15-year fixed rate is 6.85% and the 5/1 adjustable rate is 6.54%.
There is a real concern in some quarters that the Federal Reserve is not done – by a long shot – raising interest rates. Just the fact that the Fed two weeks ago made themselves sound very aggressive on rate hikes was enough to spook the markets of which the ripple effect continued into the past week. All if this bears watching.
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 33,507. The S&P 500 at 4,288. Any profit you made in this market runup of 2023 has likely disappeared. So much for the ‘Buy and Hold’ theory. Our subscribers have averaged positive returns and by following our column has exited the market weeks ago – while the Buy and Hold crowd hangs on with white knuckles…………
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’.
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. 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 position:
Money should be in or transferred into Cash (Money Market).
Your particular Mutual Funds and/or Variable Annuities may or may not offer all or any of some of the above. You MUST do your homework. Doing so and finding the portfolio in accordance with the above may position you to take advantage of what we believe to be the next market rally.
* 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.