After a Cloudy February, the Sun Peaks Out,
Markets Go Up but Face Plenty of Headwinds
March 8, 2023
Weekly Market Outlook
By Keith Schneider and Donn Goodman
Dear Southern Boating Readers:
The following commentary is from our weekend Market Outlook. We expressed an opinion that there remains plenty of headwinds, including but not limited to rising inflation and the Fed’s continued fight to bring it down by raising interest rates.
Yesterday, the Fed Chairman expressed in Congressional testimony (continues tomorrow) that the “ultimate level of interest rates is likely to be higher than previously anticipated” after the “latest economic data have come in stronger than expected”
This sent the stock market (S&P 500) down more than 1.5% for the day on Tuesday.
This week’s Market Outlook from the weekend follows:
After 4 weeks of consecutive, albeit small, negative performance weeks for most of the major indices (IWM-Small Caps were positive last week), we finally got a positive week fueled by two up days in the S&P 500, the Dow, the NASDAQ 100, and Small and Midcap stocks.
It was nice seeing the positive bias the past two days.
The past few weeks in Market Outlook, we shared with you that the back half of February, on a seasonal basis, is usually negative. I wondered if February acts like this because a) earnings are coming in and can often fall short of expectations; b) February is the least exciting and shortest month of the year; and c) it is the middle to end of Winter and people are starting to feel the lack of sun and are trudging through a period of colder, uncertain weather. Many like myself, are starting to get sick of spending more days indoors.
Whatever the reason(s), 2023 lived up to the historical February expectations and this seasonal pronouncement.
Many of the economic, market, and sentiment readings, however, remain murky and continue to be mired in uncertainty. Can the Fed bring down inflation? Will they raise 2 or 3 more times? When might they pivot? Will the numerous Fed hikes made during 2022 and early 2023 begin to kick in? When might we see the signs of a “real slowdown” or a possible mild or severe recession?
Great questions and we don’t have all the answers. Mish and the rest of us believe, however, that we are in for CHOPPY markets, stagflation, and no pivot from the Fed, at least not anytime soon.
But that doesn’t mean you won’t have multi-day or several week rallies, usually met with consolidation and/or drifting sideways or down as the market tries to find some meaningful reason for a positive bias.
In the remainder of this week’s Market Outlook we cover the following topics:
- How to interpret the current bullish-bearish sentiment readings.
- What the Fed might do next?
- What it means for the different stock markets to be sitting right on the 200-day moving average?
- How the MarketGauge investment strategies are faring and how you can take advantage of using them.
- MarketGauge’s new Bitcoin SPRINT trading system. Discover how you can be one of the first to take advantage of this back-tested profitable investment strategy using a specific ETF or cryptocurrencies – it’s your choice.
Click here to read the rest of the Market Outlook and connect with MarketGauge.com
