Summary:
This week the UK gained (another!) new prime minister (let’s see how that goes), and Twitter (the bird) has been freed! In China, Xi has renewed his mandate, with key elements of the CCP on his side.
Despite some of the bad news during this earnings season (META and Amazon, for example), the markets rallied a bit. The energy sector is booming, but tech and consumer discretionary are conservative regarding the next quarters.
The next days will probably be of indecision, ahead of the FOMC meeting and the election in the US. If you are feeling lucky, go ahead, make your bets and enter the market; but otherwise wait for confirmation. Either a end-of-year rally or another slump are ahead. Don’t forget we are in a bear market, the economy is slowing and monetary conditions have been tightening during the year.
The Stock Market Rallies, But…What About the Economy?
Video: We’re Entering Worst Economic Time in World History; Fed Is Paving Path of Destruction: Hugh Hendry
Channel: Stansberry Research
Video: Are the Fed’s policies tipping the country toward a recession?
Channel: Fox Business
Is the Short-Term Rally Over?
Who Knows!
Video: Who Will Blink First? The Fed, The Bond Market, Or The Bears? | Lance Roberts & Adam Taggart
Channel: Wealthion
Diesel Shortages Coming???
Video: Potential Black Swan The Media Is Purposely Ignoring
Channel: Rebel Capitalist
Bitcoin vs Gold
Video: Bitcoin Price Headed For $25K but More Pain to Come, Gold Remains Top Asset Pick Says Gareth Soloway
Channel: Stansberry Research
The Dow advanced more than 800 points on Friday, and the S&P 500 and the tech-heavy Nasdaq added over 2.5% each as investors digested a slew of economic data and earnings reports while reassessing their expectations for more rate increases from the Federal Reserve. The Fed’s favorite inflation rate, the PCE price index, showed that annual core inflation came slightly weaker than expected but still pointed to increasing inflationary pressures. Meanwhile, a Commerce Department report showed that consumer spending rose above expectations in September. On the corporate side, Apple jumped over 8% after the iPhone maker topped analysts’ estimates for revenue and profit. Conversely, Amazon.com shares tumbled almost 10% after forecasting holiday-quarter sales below Wall Street expectations. The Dow and S&P finished the week higher by roughly 5.6% and 4.0%, respectively, while the Nasdaq lagged, finishing only 2.0% higher.
Gold dropped below the $1,650 an ounce mark on Friday and is on track to end the week lower by 1% as an uptick in Treasury yields combined with a somewhat firmer dollar spooked investors away from the non-yielding metal. The market movement came as investors reassessed the outlook for monetary policy after a slew of economic data this week. The Fed’s favorite inflation rate, the PCE price index, showed that annual core inflation came slightly weaker than expected but still pointed to increasing inflationary pressures. Meanwhile, a Commerce Department report showed that consumer spending rose above expectations in September. The former readings came on the heels of a mixed US GDP report showing a rebound in economic activity in the third quarter but a sharp decrease in consumer and business spending. Focus now turns to the Federal Reserve, which is expected to deliver another 75 bps rate hike next week.
