- Moving the markets
After a red opening, the major indexes spent the remainder of the session battling back and managed a green close, despite much anxiety ahead of tomorrow’s release of the March jobs report. Since the exchanges are closed on Friday, there will be no market reaction until Monday.
Whenever the Bureau of Labor Statistics (BLS) revises data, you never know what to expect. Such was the case today when revised initial jobless claims showed a far worse picture than the original version. This simply represents another data point in a lengthy list this week that demonstrates anything but a growing economy.
As far as Fed rate hikes are concerned, the current odds are 50% of a 0.25% hike in May. The market also now expects more than 3 rate cuts for the remainder of 2023. To me, all of this is nothing more than a coin flip.
Bond yields were down a tad from yesterday, as the 5-year and 10-year dropped to their lowest close since September 2022, as ZeroHedge pointed out. With that, it came as no surprise that mortgage rates softened, after now having tumbled for the 4th straight week.
The US Dollar dropped, while Gold surged and notched its second highest weekly close ever.
With the markets being closed tomorrow, there will be no market commentary, but I will post the weekly StatSheet on Friday morning.
Enjoy the Easter weekend.
2. “Buy” Cycle Suggestions
For the current Buy cycle, which started on 12/1/2022, I suggested you reference my then current StatSheet for ETF selections. However, if you came on board later, you may want to look at the most recent version, which is published and posted every Thursday at 6:30 pm PST.
I also recommend you consider your risk tolerance when making your selections by dropping down more towards the middle of the M-Index rankings, should you tend to be more risk adverse. Likewise, a partial initial exposure to the markets, say 33% to start with, will reduce your risk in case of a sudden directional turnaround.
We are living in times of great uncertainty, with economic fundamentals steadily deteriorating, which will eventually affect earnings negatively and, by association, stock prices.
In my advisor’s practice, we are therefore looking for limited exposure in value, some growth and dividend ETFs. Of course, gold has been a core holding for a long time.
With all investments, I recommend the use of a trailing sell stop in the range of 8-12% to limit your downside risk.
3. Trend Tracking Indexes (TTIs)
Our TTIs changed only immaterially.
This is how we closed 04/06/2023:
Domestic TTI: +1.19% above its M/A (prior close +1.12%)—Buy signal effective 12/1/2022.
International TTI: +7.30% above its M/A (prior close +7.19%)—Buy signal effective 12/1/2022.
All linked charts above are courtesy of Bloomberg via ZeroHedge.
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