- Moving the markets
The Dow bounced back from last week’s slump, but the S&P and Nasdaq barely budged as investors waited for inflation and earnings news.
The CPI and PPI reports are due on Wednesday and Thursday, respectively, and could ease some inflation fears if they come in lower than expected.
Meanwhile, big banks will kick off the second quarter earnings season, but some analysts worry that stock prices are too high.
The bond market shrugged off the Fed’s hawkish rhetoric, as several officials repeated their calls for more rate hikes to tame inflation.
Big tech stocks stumbled but recovered by the end of the day, while small caps surged by more than 2%. Value stocks outperformed growth stocks, and short sellers got squeezed again.
The US dollar took another beating and fell back into its familiar range. Gold was flat, but its ETF edged up slightly.
Will the CPI report surprise the market or confirm its fears?
Stay tuned for Wednesday’s action.
- “Buy” Cycle Suggestions
The current Buy cycle began on 12/1/2022, and I gave you some ETF tips based on my StatSheet back then. But if you joined me later, you might want to check out the latest StatSheet, which I update and post every Thursday at 6:30 pm PST.
You should also think about how much risk you can handle when picking your ETFs. If you are more cautious, you might want to go for the ones in the middle of the M-Index rankings. And if you don’t want to go all in, you can start with a 33% exposure and see how it goes.
We are in a crazy time, with the economy going downhill and some earnings taking a hit. That will eventually drag down stock prices too. So, in my advisor’s practice, we are looking for some value, growth and dividend ETFs that can weather the storm. And of course, gold is always a good friend.
Whatever you invest in, don’t forget to use a trailing sell stop of 8-12% to protect yourself from big losses.
- Trend Tracking Indexes (TTIs)
The major indexes ended the day higher, boosted by a persistent short squeeze that started last week. Our TTIs also rose and widened their gap above the trend line.
This is how we closed 07/10/2023:
Domestic TTI: +4.70% above its M/A (prior close +3.77%)—Buy signal effective 12/1/2022.
International TTI: +5.80% above its M/A (prior close +5.37%)—Buy signal effective 12/1/2022.
All linked charts above are courtesy of Bloomberg via ZeroHedge.
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