ETF Tracker StatSheet
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JOBS, WAGES, AND REVISIONS: THE GOOD, THE BAD, AND THE UGLY
- Moving the markets
The June jobs report was a mixed bag for the markets. The economy added 209k jobs, less than the forecast of 240k, but wages grew faster than expected, raising fears of inflation and more Fed rate hikes. The unemployment rate stayed at 3.6%, the lowest since 1969.
But wait, there’s more. The previous two months’ job numbers were revised down by a whopping 110k, making 2023 the year of downward revisions. Every month this year has seen lower job growth than initially reported.
And here’s a curious fact. The government was the biggest employer in June, adding 60k jobs. That’s more than twice the average monthly increase in 2022. Maybe Uncle Sam is feeling generous, or maybe he’s preparing for something big. Wall Street didn’t know what to make of it.
The major indexes opened lower, then rallied briefly in the afternoon, only to plunge again before the closing bell. It was a roller coaster ride that left investors feeling queasy.
Bond yields spiked this week, but the short end of the curve fell back below 5%, the highest level since 2007. The dollar also took a dive, hitting a three-week low against other currencies. Gold had a wild day, swinging up and down before ending slightly higher.
The Fed is widely expected to raise rates by 0.25% later this month, but traders are still doubtful about two more hikes this year. Maybe they’re hoping for a miracle, or maybe they’re just in denial.
- “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 markets ended the week with losses, as the June jobs report showed mixed signals for the economy. Our TTIs also declined, but they stayed firmly above their trend lines, indicating a bullish outlook.
This is how we closed 07/7/2023:
Domestic TTI: +3.77% above its M/A (prior close +3.88%)—Buy signal effective 12/1/2022.
International TTI: +5.37% above its M/A (prior close +5.59%)—Buy signal effective 12/1/2022.
All linked charts above are courtesy of Bloomberg via ZeroHedge.
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