The S&P 500 (SPY) has been on a tear since November 1st when the Fed began to make their dovish tilt opening the door to future fee cuts. Sadly they hold not taking place and begin date retains getting pushed additional and additional out. That has many questioning if shares are getting forward of themselves setting issues up for a fall. Thus time to tune into what funding veteran Steve Reitmeister has to say concerning the market outlook alongside together with his buying and selling plan and high picks to remain forward of the pack. Learn on beneath for extra.
As you doubtless bear in mind out of your English Lit lessons, generally you must…”Beware the Ides of March“.
That was 3/15, the date Julius Cesar was assassinated and is usually considered as an essential test level for traders at this early stage of the brand new yr.
General, there’s not a lot to beware as most indicators proceed to level bullish. However, the S&P 500 (SPY) has rallied significantly the previous few months the place the general market does appear ripe for no less than a modest pullback, if not correction.
That idea and extra will probably be on the forefront of in the present day’s market commentary.
Market Commentary
Final week we contemplated; What Would Trigger a Bear Market Now?
To boil it down, there are 2 doubtless causes of bear markets. First, is a looming recession which drags down earnings and danger taking resulting in a radical trimming of inventory costs.
The second bear market precursor is the forming of a inventory worth bubble that turns into untenable. The final time that occurred was again in 2000 with the bursting of the tech bubble. Nevertheless, even probably the most ardent worth investor can be laborious pressed to make any such parallels to present circumstances (possibly just a few nosebleed AI shares that deserve a haircut).
Placing these concepts collectively, there’s not a lot cause to worry any looming bear market forming. However, there’s not super cause for shares to press considerably larger as I shared in my final commentary: Is the Bull Market Rising Drained?
The primary story there’s about how the beginning date for Fed fee cuts retains getting pushed additional and additional again. Please bear in mind there was a time that people anticipated that to happen in December 2023. Now we’re writing off Could 1st and HOPING June 12th is the beginning line.
Not serving to issues was the warmer than anticipated PPI report on Thursday morning the place the month over month studying of +0.6% was twice the extent anticipated.
With that information bond charges climbed and shares fell on the session. Plus, the chances of a fee minimize coming in June was shaved right down to 60% when only a few weeks in the past the in all probability was over 80%.
Hate to inform you this my associates, however I’d say odds of a June minimize is 50% at finest…in all probability decrease.
That is as a result of if the Fed is “information dependent” as they love to inform us, then the newest information says that inflation continues to be too excessive. That features the Sticky Inflation studying from earlier this week that continues to be over 4% and never shifting quick sufficient in the direction of the specified 2% goal.
This calls into query if June is an actual risk when there’s not sufficient inflation readings in that brief stretch to unequivocally imagine that top inflation is useless and buried. That’s very true given the Fed’s statements that they might fairly minimize charges too late than too early as they don’t want any smoldering embers of inflation to reignite into a fireplace.
Crucial occasion on the financial calendar is the March 20th Fed fee determination together with their quarterly Abstract of Financial Projections. Nobody on the planet is anticipating a fee minimize at this assembly. Nevertheless, they may scour each phrase within the report…and each assertion and facial features from Powell on the press convention searching for clues of what comes subsequent.
Little doubt somebody on the press convention will ask Powell what he meant by the current assertion that fee cuts are “not far” off. Most probably, he walks that remark again with extra “information dependent” discuss and “higher late than early” which clues traders in that even June could also be too quickly for the speed minimize parade.
If true, then which may be the catalyst for the lengthy awaited pullback from these present highs. Nothing scary. Only a wholesome 3-5% pullback after the 25% rally from the October 2023 low.
Nevertheless, there is no such thing as a regulation that claims that should occur. As a substitute, traders may simply proceed to only idle at this purple mild awaiting the inexperienced that finally will occur when charges do get minimize. This is able to be what you name a consolidation below 5,200 the place the market common would not transfer a lot…however leads to ample sector rotation.
Some name {that a} “rolling correction” the place every sector takes turns being on the outs at the same time as the general market indices do not transfer a lot. These sector centered promote offs trigger acceptable dips in overripe positions. That is one of the simplest ways to clear the trail for the following wholesome bull run.
Lengthy story brief, keep bullish. And keep centered on wholesome rising corporations which might be attractively priced. The POWR Scores continues to be your finest buddy find high quality shares.
Extra about that within the subsequent part…
What To Do Subsequent?
Uncover my present portfolio of 12 shares packed to the brim with the outperforming advantages present in our unique POWR Scores mannequin. (Almost 4X higher than the S&P 500 going again to 1999)
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Plus I’ve 1 particular ETF that’s extremely effectively positioned to outpace the market within the weeks and months forward.
That is all primarily based on my 43 years of investing expertise seeing bull markets…bear markets…and every little thing between.
In case you are curious to be taught extra, and wish to see these fortunate 13 hand chosen trades, then please click on the hyperlink beneath to get began now.
Steve Reitmeister’s Buying and selling Plan & Prime Picks >
Wishing you a world of funding success!
Steve Reitmeister…however everybody calls me Reity (pronounced “Righty”)
CEO, StockNews.com and Editor, Reitmeister Complete Return
SPY shares have been buying and selling at $510.73 per share on Friday morning, down $2.63 (-0.51%). 12 months-to-date, SPY has gained 7.45%, versus a % rise within the benchmark S&P 500 index throughout the identical interval.
Concerning the Writer: Steve Reitmeister
Steve is healthier recognized to the StockNews viewers as “Reity”. Not solely is he the CEO of the agency, however he additionally shares his 40 years of funding expertise within the Reitmeister Complete Return portfolio. Study extra about Reity’s background, together with hyperlinks to his most up-to-date articles and inventory picks.
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