There are a few things happening that will keep the market from making a decisive move. The first, is King Dollar. When it rises, the market sinks. When it retraces, the market gets air to rise. Of course, the shadow behind the dollar's direction and the market's, will be the Fed.
Our Call...
for the Federal Reserve to pivot was off with their last rate hike. However, we stated that if the Fed pivots in their last meeting for the year, well, then, we are not. Time will tell all. With that said, we have been collecting data and info on the present state of the economy.
Job Cuts...
will begin to effect the psyche of the market. At the moment, the market sees the Fed slowing its rate hikes. This is the force behind the market movement. However, last week, the Bank of America released a report stating that they see the loss of 175,000 jobs per month in the first quarter of 2023. Lately, we have seen teck firms announce layoffs. Layoffs rose in November from October by 129%. If you research the yoy for November, it shows a 417% rise in job cuts. And yet, the government says unemployment remained at 3.7%. Going back to the B of A report, even if this does not happen as the report believes, there are other fear factors.
Inverted Yields...
in bonds is always something to pay attention too. At the moment, 80% of short-term bonds give a higher yield than long-term notes. This is a very dark cloud.
Commodities...
got a big push last week, but the individual mining stocks did not move with the higher prices. This is disharmony. Digging deeper, take a look at Exxon-Mobil. Their project in Mozambique began producing LNG. There is a stong market for this gas, but the oil giant did not climb. This adds to the picture of divergence. We mentioned last week that Chevron received a US license to pump oil in Venezuela. The stock did nothing. This adds conviction to reveal the market has no conviction in direction. The last aspect that we well look at is the..
Consumer
A government reports reveals that their previous report on US savings pattern was wrong. It is not high, but at a 17-year low. It went from a high at $4.85 trillion to fall to $626 billion. Ouch!
If you are doing Christmas shopping, try to buy American. Peace.
