Jerome Powell and the rest of his Federal Reserve Board Members face tough decisions in 2023 as structural supply chain challenges keep inflation rates intolerably high. Looking at two previous Fed chairs, we have to decide who will provide the precedent for Jerome’s decisions in 2023. Meet Arthur Burns In the late 1970’s, Fed Chairman Read more ➝
Next week inflation numbers and the final Fed meeting for 2022 will provide investors a narrative for the rest of the years trading. As the market is up strongly in the last 5 weeks, energy is starting to signal economic weakness going forward.
With greater than 5% gain in the main US indexes in both October and November this year, December is expected to start slow and then gain steam as the Santa Clause Rally comes to town.
With the Dow up over 14% so far in October 2022, US markets are on pace to record their best October performance ever going back to 1901. While many retail investors remain bearish (see the AAII Sentiment Poll results below), we feel a new bull market is emerging – at least for the near term. Read more ➝
October is known as the ‘bear killer’ month. In US mid-term election years it can provide especially strong returns. With the economy faltering and inflation still too hot, investors are skeptical. We wait for confirmed bullish signals as markets set up for a bounce.
The US presidential election cycle last four years and shows definitive patterns historical that point to weakness in the first half of the second year. This leads to a run up in Q4 following thru to Q1 of year 3. This is known as the ‘sweet spot’ for investors.
The summer rally has impressed as the major averages pushed back to their respective 200-day moving averages, a key technical level where they stalled last week. Now they are testing new short-term support around the June highs and the 50-day moving averages. Investors are clearly not out of the woods yet.
For about 6 weeks the market has moved higher. This momentum takes many indicators to extremely overbought levels. This typically leads to weak price action going forward.
US markets besieged by unexpected inflation data. Chinese stocks get a boost from stimulus. Gold looks bullish.
Either the US is already half way into a recession or maybe half way through one. Markets perform well in most case before and after recessions. Weakness is greatest during recessions.
