The S&P 500 (SPY) managed to interrupt by way of the essential 4,000 stage, which is nice information for inventory merchants. Seems like we would be capable to climb that wall of fear in spite of everything! How did we handle to show issues round after “the worst week” to this point in 2023? Learn on to search out out.
(Please take pleasure in this up to date model of my weekly commentary initially revealed March third, 2023 within the POWR Shares Below $10 e-newsletter).
Market Commentary
he previous two days have seen a couple of constructive catalysts that kicked issues right into a constructive course and pushed shares again above 4,000 (though we nonetheless have a methods to go earlier than we retest the essential 4,100 stage).
First off, the 10-year Treasury yield additionally dropped beneath 4%, which was a constructive signal for the market.
The PMI knowledge for February additionally had merchants’ consideration. PMI improved to 50.6, beating analysts’ consensus of fifty.5. ISM Non-Manufacturing PMI went down from 55.2 to 55.1, however nonetheless managed to exceed expectations.
Based on Andrew Hunter, Deputy Chief U.S. Economist at Capital Economics, the figures recommend that the economic system is rising, however not as quick as some folks had been pondering.
Most market segments, particularly Client Cyclical and Actual Property shares, had day, apart from Client Defensive shares, which did not see a lot upward motion.
This means merchants are nonetheless in “danger on” mode, which suggests they’re keen to spend money on extra unstable belongings proper now. That is nice for our shares beneath $10.
If the S&P 500 (SPY) stays the place it’s, we’ll have a constructive week, which is a giant win after final week, which was one of many worst to this point this yr.
The Federal Reserve additionally made headlines this week, because it launched its semiannual Financial Coverage Report back to Congress. The report lays out the Fed’s plan to proceed rising rates of interest to get inflation again to 2%.
Atlanta Federal Reserve President Raphael Bostic wrote an essay calling for the central financial institution to boost its coverage fee by 50 foundation factors to a variety of 5%-5.25% after which preserve it there till effectively into 2024.
He additionally stated he is maintaining a tally of the info and can regulate his coverage trajectory if mandatory.
The Fed elevated the benchmark fee by 1 / 4 of a proportion level in February, and can launch new projections after the March 21-22 assembly.
Identical to we noticed final yr, the market will possible make some large strikes based mostly on what the Fed officers say between from time to time.
Conclusion
Whereas this week noticed some wins for the bulls, much more should occur for the S&P 500 to overhaul the essential 4,100 stage once more.
However our portfolio carried out effectively final yr regardless of the volatility, and I anticipate we’ll see the identical this yr, particularly contemplating we have now some constructive catalysts coming for a handful of our holdings.
What To Do Subsequent?
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Meredith Margrave
Chief Development Strategist, StockNews
Editor, POWR Shares Below $10 E-newsletter
SPY shares . 12 months-to-date, SPY has gained 5.69%, versus a % rise within the benchmark S&P 500 index throughout the identical interval.
In regards to the Creator: Meredith Margrave
Meredith Margrave has been a famous monetary knowledgeable and market commentator for the previous twenty years. She is at the moment the Editor of the POWR Development and POWR Shares Below $10 newsletters. Study extra about Meredith’s background, together with hyperlinks to her most up-to-date articles.
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