Weekly Market Outlook
By Donn Goodman
March 06, 2023
Welcome back to our weekly update and Market Outlook. Glad you are here and happy to share some insights about the market, the economy, and what the future may hold.
It is a good time to be an investor in almost any market (as shown below).
The frenzy that continues around AI (artificial intelligence) has propelled this market higher. More importantly, most of the analysts that are covering AI and technology stocks continue to believe we are in the early innings of a multi-year revolution in productivity and company profitability. This emerging technology has blindsided Wall Street forecasters.
In the past week alone, Piper Sandler, UBS and Barclays have all boosted their S&P 500 Index targets, which is up 7% to start the year. Two firms, Goldman Sachs and UBS have lifted their targets twice since December. Jonathan Golub, UBS Investment Bank Chief US Equity Strategies, said, “I’ve been doing the strategy job for about 20 years, and this is the first time I have ever done something like that”. His recent second revision to his 2024 target was raised to 5400 and tied him with Ed Yardeni of Yardeni Research who had been the highest among 25 strategists tracked by Bloomberg.
Last week the US PCE (Personal Consumption Expenditures) data was released. There was no nasty surprise, and the S&P notched its 14th record close on Thursday and then its 15th record close on Friday.
Even with this week’s pullback, it is a good time to be invested in just about every market. See illustration below:
A positive four months.
Since November we have been providing charts and graphs in this weekly report that indicated a positive bias. Many of these charts show what might occur when buying stocks at new all-time highs. Past statistics are significant in showing that the positive bias has been continuing. Remember two important things. The market can and will go much higher than rational expectations and many investors (including the millions that hold 401k plan assets) won’t commit money until the markets have gone up for a while and they finally get sucked in from FOMO (fear of missing out).
In the last few months, we have published chart after chart encouraging our readers to feel more confident about putting their investment capital to work in the markets. (PLEASE go back through the archives and read the Weekly Outlooks from December 2023 to recent). A recent chart from an early February Market Outlook is below:
While human instinct would say to be cautious after a lengthy and profitable run, there is historical evidence suggesting that investors can confidently buy a market especially when it hits new ALL-TIME HIGHS. See the chart below that we included in a Market Outlook about 5 weeks ago:
And don’t forget the chart we shared with you right after Valentine’s Day:
It has been a great run since November 2022. To review how far we have come since the bear market of 2022, we provide the following recap:
Clearly the past 16 months has been a positive investment period. This bull market keeps on running and may be far from being done (as illustrated in the above charts).
The big winner from the stock markets cited above is of course TECHNOLOGY stocks. The whole AI scenario began in earnest back in late 2022 and has driven many of the gains that we have seen in the NASDAQ.
From November 2023 to the end of February (Thursday of this past week as we experienced a once in four-year extra day of trading), here are the returns of those same stock market indices:
Again, you will note the big winners have been the QQQ’s (technology stocks) driving plenty of the overall returns. HOWEVER, we are beginning to see a broadening out with the past two months showing increasing NEW 52-week highs and fewer 52-week lows.
How is your portfolio doing? We would be pleased to help you evaluate how your current portfolio is doing comparatively. We will also be happy to compare that to our All-Weather portfolio blends. You might be surprised how much better you could do with active management. If you would like some information or want to discuss your current portfolio, please reach out to Rob Quinn at Rob@MarketGauge.com. Or myself, DonnG@MarketGaugePro.com.
You may be pleasantly surprised to know that we also offer a high-income blend (Trilogy) that incorporates asset management from two outside superior performing money managers. Over the last 5 years fixed income has not produced any gains (after dividend distributions) and our blends have been well above 5% per year (and 11% last year).
Click the links below to continue reading about:
- The Magnificent 7 Stocks
- Sector rotation
- Small caps
- The historical implications of the strength of the last 60 – 120 days
- The BigView bullets
- Keith’s weekly video analysis
The market’s price action and news flow can be confusing and intimidating, but investing in this environment doesn’t have to be. If you would like personal guidance and hands-on management of your assets with the assistance of tactical, risk-managed, strategies, please contact me at donn@mgamllc.com or Keith at keith@mgamllc.com.
