September's Market Puzzle: Inflation, Recession, and Energy's Surging"
September 10th 2023 Update
The market performance in September is the weakest by historical averages. Next week we’ll have the CPI data for August which is expected to be in line with the one from July.
Looking at the chart, we are still in a sideways market, waiting for more clarity on the future of inflation and the probabilities of a recession.
I have covered this situation multiple times, yet it looks like the market cannot decipher what to expect.
Right now concerns are focused on preventing inflation numbers from getting too hot. Later this year we’ll see more (or less) concerns about the likelihood of a recession coming early in 2024.
In terms of Industry groups, the Energy sector looks like breaking out, reflecting the increasing price of Oil:
Looking at defensive sectors like Utilities, Consumer Staples, and Healthcare, they are not showing any type of strength, which speaks to a market not overly concerned with an imminent recession.
Technology is a sector that is kind of “resting” after the big gains in 2023 and possibly “waiting” for more clarity on how inflation and interest rates are heading before resuming an upside or turning bearish.
The 10-year treasury yield has been trading sideways almost for a year now and it looks primed for resuming an uptrend in case inflation and/or GDP data start to go up up too fast.
See above how the 10-year Treasury yield is right at the top border of the consolidation box.
So let’s see what the market will bring us next week as a result of the next CPI number.
PORTFOLIOS
Last week my PDD 0.00%↑ order was not triggered. So there were no changes to my LARGE CAP Momentum POT.
My ML 0.00%↑ order was triggered as the stock briefly went under $20 last Friday on low volume. Now let’s see how it will behave from here.
I am not doing anything else this week.
I wish you a beautiful week ahead.
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Important: This is not investment advice. Consult a licensed financial advisor before making any investment decision.