Stocks Hanging Tough, But A Recession Is Nearing

Bank fears continue to bring added volatility

Author

Mark Roussin
March 27, 2023

Welcome to the +410 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 fast growing investing community of ~8.0K investors.

Seeking Alpha is a great place for investors to gain tons of insights on individual stocks or ETFs. The site has a SPECIAL offer right now where you can gain access to Seeking Alpha PREMIUM for only $99, normally $239. Seeking Alpha PREMIUM allows you access to ALL articles (no paywalls), Top Stock Picks, Expert Analysis, and Education webinars, podcasts, and article.
Click HERE to receive this special promotion. You can try it out for 7-days completely FREE.
*This is sponsored advertising content.

Market Talk ⏪

The stock market has held tough, and we are only a few percentage points away from having all four major stock indexes in the green. However, it has the feel as if we (investors) are walking a tightrope.

Banking fears continue to have investors on edge, and this week we will hear A LOT from Fed officials, which has proven to be market moving at times. Fed officials have been in a quiet period, as the FOMC increased interest rates by another 25 basis points last week. This was one of the most anticipated Fed announcements in awhile, with many believing a pause was in order, however, Chairman Powell remained on course. Many economists are still expecting rate cuts by the end of the year, but I believe we will have a pause for awhile before we experience any cuts.

The economic data in my eyes is beginning to deteriorate, and it appears we are getting closer to a recession. The Fed is in a tough spot with sticky inflation and a tight labor market, which is likely frustrating the Fed.

Given all the madness within the banking sector, the volatility has opened up some major opportunities for some of the high-quality banks, one being Bank of America. Here is a recent article I wrote on Bank of America. Another name to consider is Charles Schwab. Bank of America saw millions of new deposits flood in as consumers and businesses alike ran towards safety, aka Big Banks.

Although many are still baking in a recession by the end of the year, hence the rate cut projections, we are still a few weeks away from getting an update on companies with Q1 2023 earnings. As such, economic data and Fed talk will continue to rule the tape.

In international news, China and Russia met recently in which the Chinese President laid out a plan for a truce between Russia and Ukraine, which was largely in favor of Russia, not surprise there. UK inflation continues to remain quite high at more than 10% as of the most recent reading.

In this market it is important to focus heavily on size and quality right now.

Deep Dive 📰

Become a PREMIUM subscriber today for ONLY $1 PER DAY and take your investing to the next level. Premium subscribers receive the following:

  • Monthly Portfolio Updates

  • 2 Individual Stock Deep Dives Per Month

  • Top 5 Dividend Stocks Newsletter (NEW)

We will be publishing our latest Stock Deep Dive this week, so stay tuned. We published our latest Deep Dive on Deere & Co this past week.

Go PREMIUM today!

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, We have seen slow movement from Extreme Fear to just Fear in a matter of a few weeks. Currently, the index has a reading of 34, which is slightly up from the prior week reading of 25.

Earnings on Deck 💰

The earnings reports for the week:

Dividend News 📝

Here are some notable analyst upgrade/downgrades from the previous week:

  • Baird upgrades US Bancorp to overweight from neutral

  • Bernstein upgrades Pepsi to market perform from underperform

  • Goldman Sachs downgrades SL Green to sell from buy

  • Morgan Stanley upgrades Emerson Electric to overweight from neutral

  • Barclays upgrades Nike to overweight from equal weight

  • Barclays upgrades Regency to overweight from equal weight

This Week 📆

Monday

  • Fed Governor Philip Jefferson

Tuesday

  • Advance economic indicators

  • S&P/Case-Shiller HPI

  • FHFA home prices

  • Fed Vice Chair for Supervision Michael Barr at Senate Banking Committee on bank oversight

Wednesday

  • Pending home sales

  • Fed Vice Chair Barr at House Financial Services Committee

Thursday

  • Fed Vice Chair Barr at NABE conference

  • Initial claims

  • Real GDP Q4

  • Fed Vice Chair Barr at House Financial Services Committee on bank

  • Boston Fed President Susan Collins

  • Richmond Fed President Thomas Barkin

Friday

  • Personal income/spending

  • Chicago PMI

  • Consumer sentiment

  • New York Fed President John Williams

  • Fed Governor Lisa Cook

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: Skip AAPL and Buy This Dividend Stock Instead…

Here is the other video I published last week: 3 of the BEST REITs To Buy:

Here are a few others of my latest videos:

If you enjoyed the newsletter, leave a LIKE and COMMENT down below. Also, if there is someone that could benefit from this newsletter, consider sharing it.

Subscribed

Have questions? You can email me directly at [email protected].

Happy Investing!

Mark

Reply

or to participate.