September’s bloodbath is finally coming to an end. People have been asking when it will stop for weeks now, and while no one has a crystal ball, there is one thing I’m certain of…
This too shall pass.
I’m in South Florida and, thankfully, we didn’t get hit too bad by Hurricane Ian. But it’s total, heartbreaking devastation in some areas like Fort Myers. I am praying for all of the people on the West Coast of Florida.
But they will pick themselves up, rebuild and get back to as normal a life as they can. We have to roll with the punches and not worry too much about things that are out of our control. No one ever said this is going to be easy…
And that also goes for the stock market.
At the beginning of the week on Wall Street, there were a couple of factors that made me nervous…
The big number was jobless claims, which didn’t come in as weak as the market would have liked. It may sound counterintuitive, but as long as the jobs market remains strong, that’s bad for stocks because it gives Federal Reserve Chair Jerome Powell more ammo to keep raising interest rates to infinity.
But there was an encouraging number that came out Friday morning…
The Personal Consumption Expenditures (PCE) Deflator is a data point the Fed loves, and it shows inflation came in yet again stronger than expected month over month and year over year…
- PCE Deflator MoM: 0.3% actual versus 0.1% expected.
- PCE Deflator YoY: 6.2% actual versus 6.0% expected.
- PCE Core Deflator MoM: 0.6% actual versus 0.5% expected.
- PCE Core Deflator YoY: 4.9% actual versus 4.7% expected.
This is good because you would expect the market to collapse on these numbers. But it held up. When will the market bottom?
If this news came out a month ago, we might have fallen 5% today. So to see bad news while the market remains at least fairly steady tells me we could be looking at a short-term bottom.
Let’s take this a step further using Micron Technology Inc. (Nasdaq: MU), which reported earnings after the bell Thursday.
Micron slashed its first-quarter 2023 revenue projection from $6.2 billion to $4.25 billion — quite a cut.
And the stock was up about 2.4% at 1:20 p.m. on the East Coast on Friday. Not bad! This shows that a lot of the bad news we’ve gotten could mostly be priced in.
So September is coming to a close and October is a bad month from a historic perspective, but I think we could get a pop to start it.
There are so many geopolitical factors around the world impacting the U.S. stock market, so check out my video up top. We’ll discuss a few tips that could help you survive the storm with your account intact, ready to back up the truck to buy good stocks at great prices when the time comes.
Because this too shall pass.
Are there any topics you’d like to see me cover or questions you’d like answered? Send me an email at jeff@joyofthetrade.com! And be sure to stay ahead of the markets by subscribing to our YouTube channel and our Instagram page for all of the latest!
P.S. Homeowners, Beware — It Could Only Get Worse
With 2022 being such a tough year already, the LAST thing I want to do is add more rain to your parade…
Just the other day, when Federal Reserve Chair Jerome Powell committed to hiking interest rates again, and again… Something scary happened in the housing market…
Mortgage rates jumped to new highs — even higher than before the Great Recession.
- 30-year fixed: 7.479%.
- 30-year fixed FHA: 6.917%.
- 30-year fixed VA: 7.352%.
Now, for those who own a home, you might wonder what this has to do with you…
The answer is everything… Your retirement plans… Your nest egg… Your kids’ and grandkids’ futures…
