Are you taking advantage of the latest bear market rally?
Move fast... because the opportunity will be fleeting.
Over the past week, the S&P 500 has rebounded 5%, buoyed by certain earnings reports... (none from Big Tech).
And the markets were relieved to find out that third quarter GDP was in positive territory. (If you don't look too closely.)
It's just as our own Alpesh Patel predicted in late August. Based on the data he looks at daily as a hedge fund manager, he thought markets seemed sure to rally after another move downward.
After a drop in September... and a rocky start to October... here we are.
These rallies are perfect for quick, short-term trades...
Emphasis on short-term.
Because while we've gotten some better news this week, there's still a lot weighing on the markets... and the economy.
Mastercard (MA) beat expectations on revenue and earnings thanks to strong consumer spending and travel picking up...
McDonald's (MCD) beat estimates for earnings and revenue...
And Shell (SHEL) doubled profits over the same period last year... and announced it would buy back $4 billion worth of shares and increase its divided by 15%.
Sounds great... when you take it all at face value.
But here's the thing... Wall Street lowered its expectations across the board as market headwinds got stronger. So it was far easier for companies to beat those expectations.
These earnings beats and the rising market hardly mean our troubles are over. As Andy told Manward Letter readers this week...
This doesn't mean we've reached the end of the bearish sentiment. It doesn't mean we can stop worrying about what the Fed is doing... or the result of midterm elections... or the threat of World War III... or the outsized strength of the dollar... or politicians gone crazy... or the weakness in the Treasury market... or surging prices... or a weakening jobs market... or a recession.
"$20 trillion in U.S. household wealth is invested in a total scam." Those are the words of retired Lt. Col. Michael J. Carr, U.S. Air Force, CMT, CFTe.
I didn't want to believe it at first... but once he showed me the evidence, I couldn't dispute it.
The Commerce Department reported this week that U.S. GDP grew at an annualized rate of 2.6% in the third quarter. This was received warmly after two quarters of negative growth.
But as always... there's more to the story.
This growth merely made up for the economy's contraction in the first half of 2022, putting us at net-zero growth for the year.
Our economy has stalled out.
Investment in the residential housing market contracted for the sixth straight quarter... plunging 26%. And this is sure to get worse - mortgage rates are above 7%, their highest level in two decades. (And more than twice as high as they were just one year ago.)
Growth in consumer spending slowed to 1.4%. And considering the U.S. consumer accounts for more than two-thirds of our economic activity... that's not good news.
For months, Washington pointed to strong consumer spending as a sign that our economy was just fine.
Well, no more. Rising costs, climbing interest rates and stubbornly high inflation are taking their toll.
There are plenty of signs that there's more pain to come... but it's clear any positive news will give the markets a boost.
Smart investors should look for quick, short-term opportunities when that happens.
Stock of the Week: An Industrial Company Wired for Success
Thanks to the low interest rate environment of the past 13 years, lots of companies have a lot of cash on hand. Many of them are using that cash to update their infrastructure. And that's where Alpesh's latest Stock of the Week comes in. It has made some impressive strides over the past five years... with growth coming in at more than 50% annually. Click here or on the image below for all the details.
What It Really Takes to Survive a Bear Market
Hunting bears up north is like so many things in our lives. It's no different from raising good kids... building a good community... or getting rich. It takes time, understanding and dedication. The rewards are out there. They're not easy to get... nor should they be. But they exist, and we have the proof. Keep reading...
Parting Words
"To rule a country of a thousand chariots, there must be reverent attention to business, and sincerity; economy in expenditure, and love for men; and the employment of the people at the proper seasons."- Confucius
Amanda Heckman is the editorial director of Manward Press. With unrivaled meticulousness, she has spent the past dozen or so years sharpening Andy's already razorlike wit... and has worked with numerous bestselling authors and award-winning financial gurus along the way.
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