- Moving the markets
The market bulls were in a festive mood today, as stocks climbed higher despite some gloomy economic data and a delay in OPEC’s decision on oil production. The bond market, however, was not so cheerful, as the 10-year Treasury yield briefly dipped to its lowest level in two months before bouncing back.
The rally was broad-based, with more than half of the stocks on both the NYSE and the Nasdaq advancing. The tech sector was especially strong, as investors shrugged off Nvidia’s disappointing guidance and focused on its solid earnings beat. The chipmaker’s shares dropped 2.5%, but still outperformed the energy sector, which fell 1% after crude oil plunged over 4.5% before recovering some of its losses.
The Fed’s latest minutes did not offer much hope for the rate-cut enthusiasts, as the central bank reiterated its hawkish stance and showed no signs of easing its monetary policy anytime soon. But the market seemed to ignore the Fed’s words and instead priced in a low probability of a rate hike in December.
The economic data was not very encouraging, as jobless claims surged, durable goods orders slumped, consumer sentiment dipped, and inflation expectations rose. These indicators suggested that the US economy was losing steam and facing the risk of a hard landing.
The dollar tried to rally on the back of the Fed’s minutes, but failed to sustain its momentum and ended the day lower. Gold also struggled to hold on to its $2k level, as investors preferred riskier assets.
The S&P 500 followed its seasonal pattern and rebounded from its October lows, catching up with its historical average. The index is now within striking distance of its all-time high, as it heads into the Thanksgiving holiday.
I will be taking a break from writing these summaries until next Monday, so I hope you enjoy your turkey and cranberry sauce.
2. Current “Buy” Cycles (effective 11/21/2023)
Our Trend Tracking Indexes (TTIs) have both crossed their trend lines with enough strength to trigger new “Buy” signals. That means, Tuesday, 11/21/2023, was the official date for these signals.
If you want to follow our strategy, you should first decide how much you want to invest based on your risk tolerance (percentage of allocation). Then, you should check my Thursday StatSheet and Saturday’s “ETFs on the Cutline” report for suitable ETFs to buy.
3. Trend Tracking Indexes (TTIs)
The stock market ended on a high note before the long weekend. The major indexes, such as the Dow Jones, the S&P 500, and the Nasdaq, all closed with gains on Wednesday.
Our Trend TTIs, which measure the direction and strength of the market trend, also improved, and confirmed that the market is in a bullish phase.
This is how we closed 11/22/2023:
Domestic TTI: +1.67% above its M/A (prior close +1.19%)—Buy signal effective 11/21/2023.
International TTI: +3.27% above its M/A (prior close +3.13%)—Buy signal effective 11/21/2023.
All linked charts above are courtesy of Bloomberg via ZeroHedge.
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