A choppy week as investors with very divergent opinions battled each other daily.
One group anticipates a severe recession looms on collapse of real estate values, thus they are selling stocks now, while the other group of investors assumes a “soft landing” for the economy based on stable corporate earnings and no more Fed rate increases, thus they are buying stocks now.
The net effect of these competing sentiments was choppy prices and slight price declines for most stocks on the week, including many of ours, with our others generally neutral.
Don’t be fooled by the highly-rigged S&P500 Index (and DowJones Industrials Index) finishing at new highs, suggesting the broad market return so far this year is +17%. The 7 mega-stocks in the S&P500 Index have such an over-sized influence on the index that without them the year-to-date return of the “S&P453” is only +4% (that return is available in a money market account or CD with no market risk). The average investor is barely profitable, and after factoring in inflation is unprofitable through 29 weeks.
Next week could move stock prices more than usual, owing to much information set for release – consumer confidence, homes sales, Fed rate decision, GDP data, inflation data, and many corporate earnings reports from companies in the S&P500.
Meanwhile, we absorb this market choppiness and await the emergence of the next sustained trend of price movement, in either direction. Very few trades currently.
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