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Welcome to the +121 new subscribers who joined our Dividend Investor’s Edge community this past week. If this is your first time reading, but you have not yet subscribed, join our growing investing community of over 2K investors.

Market Recap ⏪

Last week, the markets were a roller coaster. The first few days of Octobers had investors cheering as the S&P 500 exploded for over a 6% gain through the first half of the week before seeing it all evaporate by the end of the week.

The first two days worth of gains in October was the best two-day gains in the stock market since April 2020. Everything changed last week when the latest jobs report was released showing the labor market remains strong.

We have fallen on weird times when it comes to the stock market as good data has become bad news for investors and vice versa. Last week, we saw the unemployment rate in the US drop to 3.5%, which was a 20 basis point decrease from the prior month. Less people filed for unemployment benefits, which seems good, yet it was seen as a negative to investors, leading to the sell-off to close the week.

Why was this seen as a negative to investors you might ask? The strong labor force is an indication we could see a CPI number this week that could be little changed, meaning the Federal Reserve has plenty of ammo to continue rising rates. A 75 basis point hike is again likely in November, which will further add pressure on equity valuations.

The economy added 263,000 jobs in the month of September, which was much weaker than the prior month’s 315,000 job additions. The September job adds were the lowest since April 2021.

We are starting to see the Fed’s monetary policy starting to take action on some businesses. Advanced Micro Designs (AMD) this past week gave a warning of weaker than expected earnings, which we are beginning to hear from other companies as well. Fed-Ex (FDX) already reported weak earnings with a grim outlook, and this past week they also mentioned volume guidance taking a hit. Retailers such as Target and others have also suggested inflated inventory levels, which have forced them to liquidate that inventory.

Now we turn our attention to not only the CPI report, but also the start of the Q3 earnings season. Expectations for the CPI print are 8.1%, meaning we are still dealing with high inflation. Anything lower than the expectation could provide for a relief rally in the markets.

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 a neutral reading to an Extreme Fear reading. Inflation hot, rates moving higher for longer, and earnings needing to come down all leading to more pain in the markets. Currently, the index has a reading of 25. The reading actually bounced off the low of last week at 15.

Source

Earnings on Deck 💰

Q3 earnings are officially underway as the financials get us started at the end of the week.

• Wednesday (BMO): PepsiCo

• Thursday (BMO): Walgreens Boots Alliance

• Friday (BMO): JPMorgan Chase

• Friday (BMO): Morgan Stanley

• Friday (BMO): Citi Bank

• Friday (BMO): UnitedHealthGroup

• Friday (BMO): Wells Fargo

Source

Notable Analyst Updates 📝

• Goldman Sachs upgrades Wells Fargo (WFC) to buy

• Baird cuts Nike (NKE) PT to $100 from $127

• Barclays cuts Nike (NKE) PT to $83 from $110

• Atlantic downgrades Morgan Stanley (MS) and Goldman Sachs (GS) to neutral

• Morgan Stanley lowers Bank of America (BAC) PT to $36

• Morgan Stanley lowers JPMorgan Chase (JPM) PT to $126

• Morgan Stanley upgrades Ford (F) to overweight

• JPMorgan increases PT to $220 for shares of Caterpillar (CAT)

• Mizuho cuts PT of Walgreens Boots Alliance (WBA) to $36

• Baird downgrades Norfolk Southern to neutral and cuts PT to $240 from $280

• Citi cuts PT of GXO Logistics (GXO) to $52

This Week 📆

Monday

• FED ALERT: Fed Vice Chair Brainard

Tuesday

• Durable and factory orders

• Job openings

• FED ALERT: Fed Governor Philip Jefferson

Wednesday

• EARNINGS ALERT: PepsiCo

• FED ALERT: Fed Vice Chair Barr

• FED ALERT: Fed Governor Bowman

Thursday

• Jobless claims

• Consumer Price Index (CPI)

• EARNINGS ALERT: Delta Air Lines, Walgreens, Domino’s, and Blackrock.

Friday

• U of M Consumer Sentiment

• EARNINGS ALERT: JPMorgan Chase, Morgan Stanley, Citi, UnitedHealth Group, Wells Fargo

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 where I discuss how you can receive a dividend EVERY month:

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Have a Great Week!

Mark