The last two trading days of the week saw investors sprint back into the market. Doing so in a backdrop of more interest rate hikes by the Fed, an Inflation rate above 6% and a possible (likely) recession that is being looked at as just another day at the park. The quandary for investors, be they professional traders or those with only a retirement account, is what are the next, most prudent steps to take.
The February jobs report will be announced this Friday and preliminary numbers look to be in the neighborhood of 215,000 new positions added.
The week saw some solid gains and although our position is currently in money market accounts, we will be prepared to jump back into the market should the numbers dictate it. We always follow our investment strategies and as our subscribers are aware we base our analysis on solid information and not emotion.
The S&P 500 has moved back into a bearish position, closing above it’s 50-day average and is staying above it’s 200-day average. This, as our readers know, is a very bullish signal. Although we still see turbulence ahead, should our indicators change we will announce them. In the meantime, if the S&P 500 climbs above, and closes above, 4,300 the Bear Market will come to a close. The S&P closed at 4,045 on Friday, up 64 points.
The Nasdaq 100 is trading above it’s 200-day average, while the Russell 2000 Small Cap index is trading above its 50-day moving average. When small cap stocks show strength, that usually indicates a strong market ahead. But there are so many other indicators blinking yellow.
The Housing market saw 30-year mortgage rates climb back over 7%, to 7.06% which is the highest rate since November. Expect to see these rates continue their uptrend in the next few weeks and months as interest rates continue to increase.
Consumers continue to use savings - and credit as well – to live. Lending institutions are now transitioning into much more stringent requirements in order to avoid any sudden downturns in the economy and stock market.
As you’ll recall, the Federal Reserve began slowing down the size of the interest rate hikes in the fall and as the economy is gaining strength and inflation begins to creep up we will likely see interest rate hikes more in line with ½% or ¾% hikes as opposed to ¼% hikes the Street is, and has been, counting on. What the economy is actually showing will become apparent over the next 60-90 days.
This week’s report will be short. Be ready to respond to our Mid-Week Market Alerts (if needed) for further clarification on where money should be.
Currently we are in Cash (Money Markets), but again, this can change so please respond to our emails should a change be warranted.
We are issuing a Market Update regarding the following positions:
Gold Funds – Bearish. Transfer into Cash (Money Market)
Although we did not take a position in the U. S. Dollar, we are advising those subscribers currently invested in the U.S. Dollar to transfer into Cash (Money Market)
These transfers should be initiated before the close of business today 2/7/23