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Market Talk ⏪

Last week we saw a whirlwind of earnings releases from notable companies. Apple beat and saw shares bounce strongly on Friday, but Alphabet (GOOGL), Amazon (AMZN) and Meta Platforms (META) released earnings and subsequently saw their stock prices crater. Refer to the Earnings Recap tab for more details.

Investors have enjoyed a major rebound in equities, one that has been the largest one-month rebound since the late 1970s as it relates to the Dow Jones Industrial.

This week we turn the page onto a new month and all eyes will be on the Fed, as they are expected to once again increase interest rates by 75 basis points. That would not shock markets at all, but what investors are looking for is more clarity on their policy plans moving forward. I am still in the camp that believes we get a 75 basis point hike this week and another 50 basis point hike in mid-December.

In addition to the Fed, this week will also be the busiest as it pertains to corporate earnings. This week alone, a third of the S&P 500 companies will be releasing their latest results, which means we get more information on how they are performing and what they are forecasting up ahead.

The theme continues to be that results are “not as bad as expected” but have all shown a slowdown in most businesses across various industries.

Another strong week in the market could be the start of that end of year rally many in the market have been calling for. If the Federal Reserve gives investors any insight into a possible slowdown in their interest rate hiking plan, that could send the markets soaring higher. From all the previous commentary, I expect the Fed to remain steadfast in their plans with no real change in direction, at least for the near term.

Can the latest rally be trusted or is this another one of those bear market rallies? JPMorgan and Bank of America both came out with notes to their clients warning them about the rally we saw in October. JPMorgan even went as far as to say that “this is a great opportunity to de-risk your portfolio.” A notable tech hedge fund manager, Dan Niles, reiterated that he believes we could see the S&P 500 fall to 3,000.

I have my concerns about the rally as well considering the economic headwinds and pending recession in front of us. The consumer has proven resilient thus far, but much of that has to do with the amount of cash they were able to save up with the number of stimulus checks everyone received the past few years. Personal Savings grew to $6.5 trillion during the pandemic and the latest reading shows that same reading falling to $650 billion. This will lead consumers to begin questions certain types of purchases, which could result in times of trouble during the holidays for retailers. Banks are also seeing a weakening consumer as they have continued to hike their credit reserves.

In international news we got a new UK Prime Minister in Rishi Sunak and also last week China released their third quarter GDP results. During the quarter, the Chinese economy grew by 3.9% over prior year, beating expectations.

Earnings News 📰

Earnings news will be tracked in the Earnings Recap section, which is a NEW ADDITION to the newsletter based on the feedback I received from you, the readers.

US Markets 🇺🇸

Here is a performance summary for US Equities:

Here is a look at US Treasuries:

The Fear & Greed Index measures market sentiment based on the following seven factors: put/call ratios, junk bond demand, stock price breadth, market volatility, stock price strength, safe-haven demand, and market momentum.

When it comes to the Fear and Greed Index, in a matter of a few weeks we went from an Extreme Fear reading and now sit at a Greed rating after a strong run in the markets. Although we are seeing a Greed level after one of the best one month performances in the stock market in recent history, the overarching economy still has a lot of headwinds, so buyers beware. Currently, the index has a reading of 61, which is not much change from the prior week reading of 45.

Source

Earnings on Deck 💰

Another huge week of earnings on tap.

• Pfizer

• Eli Lilly

• Advanced Micro Devices

• CVS Health

• Paramount Global

• The Progressive Corporation

• Qualcomm

• Starbucks

• Duke Energy

• The Hershey Company

• Source

Notable Analyst Updates 📝

• Raymond James upgrades shares of AT&T to STRONG BUY

• Barclays lowers PT of Qualcomm to $120

• Wells Fargo cuts FedEx PT to $160

This Week 📆

Tuesday

• Fed Meeting begins

• S&P Global Manufacturing PMI

• ISM manufacturing

• Construction spending

Wednesday

• ADP Employment

• Fed Policy decision

• Fed Chair Jerome Powell Briefing

Thursday

• Initial Jobless claims

Friday

• Employment Report

Other Resources 📺

If you have not done so yet, definitely check out my growing YouTube community where I publish weekly videos on Dividend Stocks I am looking at.

Here is a look at my latest video in which I sat down for a Q&A session with the CEO of Citizen Mint, in which they focus on impact investing within the Private Real Estate field. Take a look here:

Here is a look at another video in which I discuss 3 High-Yield Dividend Aristocrats:

Here are a few others of my latest videos:

Earn Dividends EVERY Month

Top 3 Dividend ETFs

5 FOREVER Dividend Stocks

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Have a Great Week!

Mark