Monday, October 17, 2022

🤑 Why We May Get More Market Volatility this Holiday Season

Good morning. Interest rates have been rising at their fastest level in 35 years. Coming off of...

 

It's the monthly jobs numbers today and they're not going to be pretty and will be possibly the tip of the iceberg as we head into May.

Good morning. Interest rates have been rising at their fastest level in 35 years. Coming off of zero percent, rates are up nearly 2.5 percent in a matter of months. That's faster than rate hikes in 1994 and 1995 that led to a big market drop. And it makes the pace of the 2015-2018 rate hikes seem slow by comparison.

With last week's inflation data, a further increase of 0.75 percent is baked into the cards for the November Fed meeting. That will further increase the overall speed of the current rate hikes. And it pushes out the likelihood of a pivot away into 2023.

That suggests markets will remain volatile in the months ahead, even as we get past the autumn months that are historically the worst for markets. That may mimic the 2018 bear market, which saw its low right at the end of the year.

Now here's the rest of the news:

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MARKETS
DOW 29,635.23 -1.34%
S&P 3,583.12 -2.36%
NASDAQ 10,321.39 -3.08%
*As of market close
Markets slid lower on Friday, giving up early morning gains.
Oil dropped 3.7 percent, closing at $85.80 per barrel.
Gold dipped 1.7 percent, last going for about $1,649 per ounce.
Cryptocurrencies trended lower, with Bitcoin at $19,182 at the stock market close.

Today's TOP TIPS
Buy Beaten Down Winners Ahead of the Next Market Rally

Bear markets tend to occur every few years. And they include a selloff in all assets – whether of high quality or poor. It's unusual for blue-chip names to take such a big hit in the span of a year without a strong recovery in the next year.

Yet that's where investors are today. Buying quality names on the cheap can lead to large returns in the years ahead, especially if the market is close to bottoming ahead of a recovery rally.

» FULL STORY

Insider Trading Report: UMH Properties Inc (UMH)

Matthew Hirsch, a director at UMH Properties Inc (UMH), recently picked up 3,207 shares. The buy increased his holdings by 8.5 percent, and came to a total price of $49,933.

That's on top of other buys from company insiders over the past six months. Going back further, track record includes some sales. But overall in the past three years, insider buys have far exceeded sales, including a major spike in insider buying in early 2020.

» FULL STORY

Unusual Options Activity: Caterpillar (CAT)

Shares of construction equipment manufacturer Caterpillar (CAT) have lost about 8 percent in the past year. One trader sees a rebound in shares in the coming months.

That's based on the December $195 calls. With 60 days until expiration, 6,818 contracts traded compared to a prior open interest of 333, for a 21-fold rise in volume on the trade. The buyer of the calls paid $6.88 to get into the trade.

» FULL STORY

IN OTHER NEWS
Retail Sales Flat in September

Retail sales came in flat for the month of September. Economists were expecting a 0.2 percent rise. While disappointing, sales are still 8.2 percent higher compared to a year ago. Given the slowing economy, flat sales overall may still be a sign of consumer strength, and may last into the holiday season.
Kroger Makes Offer for Albertsons

Grocery chain Kroger (KR) has made a $25 billion offer to buy rival chain Albertsons (ACI). The deal is expected to close in 2024, and would have a combined footprint of 5,000 stores with more than $200 billion in sales nationwide. The consolidation is occurring as dollar chains and box stores have provided strong competition for grocers.
Banks Report Lower Profits

Slowing merger deals on Wall Street are impacting big banks this earnings season. Morgan Stanley (MS) reported a 29 percent drop in profit compared to a year ago. Other big banks, like JPMorgan Chase (JPM) have likewise reported a decline in earnings from reduced trading activity this quarter.
Beyond Meat to Cut 19 Percent of Staff

Plant-based meat alternative producer Beyond Meat (BYND) will cut about 200 employees. That's about 19 percent of the company's workforce. The move comes as sales have declined, and shares are down nearly 80 percent in the past year. A number of company executives are also departing.
Meta Struggles with Leg Avatars

Meta Platforms (META) is working on providing avatars in its Horizon Worlds metaverse with legs. Currently, leg animations have been made via motion capture technology, rather than VR-based tracking, and avatars on the platform currently stop at the torso. Meta has spent an estimated $15 billion on developing the platform so far.

S&P 500 MOVERS
TOP
USB 3.36%
DAL 2.304%
WFC 1.864%
JPM 1.664%
VNO 1.293%
BOTTOM
FRC 16.433%
MOS 9.885%
CF 8.4%
SIVB 7.911%
TSLA 7.546%

Quote of the Day
Maybe we get this last gasp higher in inflation and from here we start to decelerate. I think there's still plenty of things that could drive volatility and intraday swings are just the nature of the beast right now.
- Liz Ann Sonders, chief investment strategist at Charles Schwab, on the latest inflation read and why the market may remain volatile both up and down for several months, even if inflation starts to permanently come down.

Sponsored Content
Market Wizard who predicted all indexes would be negative in 2022 shares shocking new forecast:

"Prepare for Five Years of Famine"

Click here for the name of the one ticker you need to protect yourself.


 
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