Issues
A new day, and maybe a new term for some of us. That is, “rolling recession.” After expectations of a hard landing, then soft landing, then pushing a possible recession further down the line, economists have now decided we may just be having a rolling recession, which affects just a few industries at a time.
So, I guess, currently, that could possibly mean that the following sectors which are negative so far in 2023 may be in a recession,
So, I guess, currently, that could possibly mean that the following sectors which are negative so far in 2023 may be in a recession,
Welcome to our first annual TOP PICKS issue! For this month, I asked the Cabot analysts to give me a couple of their top picks for 2023. I think you will find they have produced a nice selection of companies in diverse sectors. And just as I did in my previous newsletter, Wall Street’s Best Stocks, I’ll keep track of their picks and let you know how they fare.
Welcome to our first annual TOP PICKS issue! For this month, I asked the Cabot analysts to give me a couple of their top picks for 2023. I think you will find they have produced a nice selection of companies in diverse sectors. And just as I did in my previous newsletter, Wall Street’s Best Stocks, I’ll keep track of their picks and let you know how they fare.
The good news is that it seems that the markets are back on track, although we remain cautious.
Economic statistics continue to be strong, with factory orders and consumer confidence better than analysts expected. Home prices have moderated somewhat, although interest rates and the continuing lack of inventory are not helping that market.
Economic statistics continue to be strong, with factory orders and consumer confidence better than analysts expected. Home prices have moderated somewhat, although interest rates and the continuing lack of inventory are not helping that market.
The market had a nice run in October, with the Dow Jones Industrial Average gaining 14% for the month.
The economy continues to look pretty good, with manufacturing steady, construction spending up, and employment still healthy, despite a 200-basis point increase in the unemployment rate, now 3.7%.
The Federal Reserve once again boosted the Fed Funds rate by 0.75% this month, which the markets had already built in. Right now, it looks like Fed Chair Jerome Powell may target rates even higher than the 4.5-4.75% initially projected, but the rate increases might come in smaller doses.
The economy continues to look pretty good, with manufacturing steady, construction spending up, and employment still healthy, despite a 200-basis point increase in the unemployment rate, now 3.7%.
The Federal Reserve once again boosted the Fed Funds rate by 0.75% this month, which the markets had already built in. Right now, it looks like Fed Chair Jerome Powell may target rates even higher than the 4.5-4.75% initially projected, but the rate increases might come in smaller doses.
The market roller coaster continued this past month, with inflation worries and rising interest rates leading the charge.
I believe this volatility will continue at least until the first quarter of next year. Consequently, I’m moving the portfolio in a more conservative direction at the moment.
Having said that, however, economic indicators continue to be positive. Motor vehicle sales are still strong, with 13.5 million units sold last month, better than expected. The ADP employment report also exceeded forecasts, with 208,000 new jobs coming online. And the unemployment rate fell to 3.5% from 3.7% the prior month.
I believe this volatility will continue at least until the first quarter of next year. Consequently, I’m moving the portfolio in a more conservative direction at the moment.
Having said that, however, economic indicators continue to be positive. Motor vehicle sales are still strong, with 13.5 million units sold last month, better than expected. The ADP employment report also exceeded forecasts, with 208,000 new jobs coming online. And the unemployment rate fell to 3.5% from 3.7% the prior month.
The market has continued its volatility since mid-August, rising above 34,000 on the DJIA, then contracting, just to bolt upward again at the end of last week. Economic uncertainty and fears of a recession, although recently economists have been decreasing their likelihood for a 2022 recession, effectively pushing that into 2023.
The unemployment rate for August unexpectedly rose to 3.7%, but unemployment claims in the past week were less than forecast. It’s still a great market for folks looking for jobs.
We’ll have new housing stats next week, but anecdotally, I can tell you that prices are still being reduced in my region, but sales activity has increased, after about a six-week lull.
The unemployment rate for August unexpectedly rose to 3.7%, but unemployment claims in the past week were less than forecast. It’s still a great market for folks looking for jobs.
We’ll have new housing stats next week, but anecdotally, I can tell you that prices are still being reduced in my region, but sales activity has increased, after about a six-week lull.
The market looks pretty good these days. I’m not saying we are completely out of the woods, but the indicators are promising. The Dow Jones Industrial Average has risen about 1,500 points since last issue. And while Energy (up 36.8%) and Utilities (up 3.7%) are the only two sectors ahead for the year, we’re seeing positive moves in several other areas.
On the good news side, expectations for inflation seem to be tempering. We’ll know more tomorrow, but right now economists are calling for a decline in the inflation rate from 9.1% in July to 8.7%. And in better tidings, the three-year inflation rate is now forecast at 3.2%, down from 3.6%.
On the good news side, expectations for inflation seem to be tempering. We’ll know more tomorrow, but right now economists are calling for a decline in the inflation rate from 9.1% in July to 8.7%. And in better tidings, the three-year inflation rate is now forecast at 3.2%, down from 3.6%.
Interest rates are still rising, as the Federal Reserve boosted short-term rates by 75 basis points last month, to try to stem the growth of inflation. There are some signs that it may be working. The 30-year mortgage rate actually saw a couple of decreases early last week, but nudged a bit higher on Friday, to a 5.94% average national rate. And gas prices have declined nationwide to $4.66 per gallon, from $4.68 this time last week. I know that’s not much, but, hey, we’ll take what we can get!
Are you tired of turning on your television first thing in the morning and getting heartburn over the market’s gyrations?
Yeah, me, too. So, I’m swearing it off. I’m only going to peek at it a couple of times a day, since it doesn’t seem to be finishing the day as it starts, and I just don’t need the angst.
Instead, I’m going to keep looking at the macro-economic figures and try to do my very best to find the right investments for you to weather these ups and downs.
Yeah, me, too. So, I’m swearing it off. I’m only going to peek at it a couple of times a day, since it doesn’t seem to be finishing the day as it starts, and I just don’t need the angst.
Instead, I’m going to keep looking at the macro-economic figures and try to do my very best to find the right investments for you to weather these ups and downs.
As Mike Cintolo, Chief Analyst of Cabot Growth Investor and Cabot Top Ten Trader always says, “you shouldn’t fight the tape.” The markets are battling it out these days, trying to find a bottom. The constant news cycle of Russia-Ukraine, rising rates (up 0.5% last week) and increasing inflation are causing a severe case of market indigestion and volatility.
What’s an investor to do? As I’ve been saying for the past 6 or so months, judicious investing is the key. While most sectors (except Energy and Utilities) and the majority of equities, are down for 2022, there are still pockets of ideas worth investigating, including some defensive moves.
With that being said, I think investors should be keeping some cash on the sidelines, as when this market shows signs of a long-term turn, there will be plentiful bargains to be had.
What’s an investor to do? As I’ve been saying for the past 6 or so months, judicious investing is the key. While most sectors (except Energy and Utilities) and the majority of equities, are down for 2022, there are still pockets of ideas worth investigating, including some defensive moves.
With that being said, I think investors should be keeping some cash on the sidelines, as when this market shows signs of a long-term turn, there will be plentiful bargains to be had.
See-sawing—that’s what these markets bring to mind. And I think we can expect more of the same, due to three factors:
- 1. The war in Ukraine2. Rising inflation—up about 8.4% last month3. Increasing interest rates. Economists now expect the Federal Reserve to raise rates by one-half a percent, in both May and June
Alerts
In last week’s issue of Cabot Stock of the Month, I introduced you to a new section of the newsletter—ETF Strategies, which combines the portfolios and strategies of the former Cabot ETF Strategist newsletter.
I also created Risk Tolerance classifications: A for Aggressive, M for Moderate, and C for Conservative, for both ETF Strategies and the investments in the Cabot Stock of the Month portfolio.
I also created Risk Tolerance classifications: A for Aggressive, M for Moderate, and C for Conservative, for both ETF Strategies and the investments in the Cabot Stock of the Month portfolio.
Clif Droke, Chief Analyst for Cabot’s SX Gold & Metals Advisor, advised me that he had traded out of our latest recommendation, the iPath Series B Bloomberg Tin Subindex Total Return ETN (JJT).