New Quarter, More Volatility

Last week, the three major U.S. stock markets were mostly little changed.  The moves on the week had the Dow -0.1%, S&P 500 +0.1%, and NASDAQ Composite +0.7%.  Last week, the yield curve flattened and finally inverted with 2s topping 10s marginally.  The doomsayers of this forward indicator of future recessions, came out of the woodwork.  Readers, as we first discussed over 9 months ago, when few others were talking about this, this is NOT a coincident indicator for stocks or the economy.  As Goldman Sachs’ head strategist David Kostin  notes, most times, an inverted yield curve is a time to buy not sell.

Please recognize that following the news events on TV (liberal or conservative) is most often useless and even misleading when it comes to your portfolio.  Now those same channels have moved on to the non-stop pounding of your news feed of the dooming qualities of a “inverted yield curve.” Russia has been pushed back as “news” in only 2-4 weeks?  See how the media works?  Lurching from one crisis to the next?  These things often matter, but not as often, as much, or when those on TV lead you to believe

For investors glued to the TV’s feeding off the negativity being presented by the news media, please recognize that the market bottomed the exact day that Russia invaded Ukraine.  We covered the “normalcy” of this dynamic around wars and stock markets a few weeks ago.  Since then, we have rallied 10% and 430 points off that low.  Readers, this is not much different than when the market bottomed at in March 2020 while the worst of the Covid deaths were being reported, along with record unemployment numbers, nationwide economic lockdowns being ordered, and the economy being in recession.  During the next 2 quarters, the S&P500 rallied 1000+ points off the March 2020 low.

This weekend, Tesla CEO Elon Musk purchased a giant stake in Twitter (TWTR) making him the largest outside shareholder in the social media stock. Musk now owns a 9.2% stake. TWTR is up over 20% this morning.

For only the 4th time ever, the S&P500 gained at least 1% for 4 consecutive days. According to Ryan Detrick, a year later it has been up more that 20% every single time with an average gain of 28%.  On Friday March 18th, over 90% of stocks in the S&P500 rose above their 10-day moving averages. According to Ned Davis, since 1982 the S&P500 has been higher a year later 35 out of 36 times.  The reading setups look remarkably like both early April 2020 and late October 2020, both proceeding strong 9–12-month rallies.

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 This content contains general information and express the views of Oak Harvest Investment Services. All data, articles, and information cited are believed to be reliable at the time of creation; however, Oak Harvest does not warrant any information contained herein to be correct, complete, accurate or timely.

Oak Harvest provides links to content produced by other websites that OHFG does not control, and Oak Harvest does not necessarily approve or endorse such content and does not guarantee its accuracy. Nothing in this content constitutes personalized investment advice. Any charts, indicators, or graphs included or referenced in this content have limitations, and no such material is able, in and of itself, to provide a buy or sell recommendation for any security. Strategies and ideas discussed may not be right for you, and views and opinions expressed may change without notice. Strategies and ideas discussed will not apply to all client accounts or portfolios.

Nothing in this content constitutes a recommendation, or an offer or solicitation to buy or sell securities. Oak Harvest makes no assurance as to the accuracy of any forecast or projection made. Not all past forecasts or projections have been accurate. No current or future forecasts and projections are guaranteed to be accurate.  And future forecasts may not be as accurate as any forecasts discussed. Indexes like the S&P 500 are not available for direct investment and your results will differ. Past performance is not indicative of future results. Investing involves the risk of loss.

 

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New Quarter, More Volatility
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New Quarter, More Volatility
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Last week, the three major U.S. stock markets were mostly little changed. The moves on the week had the Dow -0.1%, S&P 500 +0.1%, and NASDAQ Composite +0.7%. Last week, the yield curve flattened and finally inverted with 2s topping 10s marginally. The doomsayers of this forward indicator of future recessions, came out of the woodwork. Readers, as we first discussed over 9 months ago, when few others were talking about this, this is NOT a coincident indicator for stocks or the economy. As Goldman Sachs’ head strategist David Kostin notes, most times, an inverted yield curve is a time to buy not sell.
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Oak Harvest Financial Group
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