The S&P 500 (SPY) is up nearly 50% from the bear market lows. That is a sign the easy money has been made. The next likely catalyst for stocks will probably be the first Fed rate cut…but maybe that is really the final push before a long overdue sell off? Tune in to discover what investment veteran Steve Reitmeister has to say about the market outlook along with his trading plan and top picks to stay ahead of the pack. Read on below for more.
It is clear that the Fed decision to lower rates is the main catalyst everyone is waiting for. The next chance that could happen is on Wednesday May 1st.
Since the Fed is “data dependent” (as they repeat like a skipped record) then we are best served focusing on the calendar of upcoming data…and what that tells us about the rate cut decision and market outlook. Read on below for the full story…
Market Commentary
The backdrop is simple. The Fed seems to be successfully guiding the economy towards a soft landing while at the same time easing inflation back towards the 2% target.
As Powell detailed at the last meeting, the Fed can indeed start lowering rates before they arrive at the 2% target because rates would still be restrictive after the first cut. Secondly, there are delayed effects of raised rates and if you waited til you got to precisely 2% you may actually risk doing unnecessary damage to jobs market (which is the other half of their dual mandate of maintaining steady prices and maximum employment).
Right now, virtually no one expects that rate cut to take place at the May 1st meeting as the last round of inflation data was a tad too hot. Thus, just one more serving of monthly inflation data in April would not be enough to get these academics to vote confidently in a rate cut.
Instead, the focus is on whether June 12th will be the starting line for rate cuts. Presently the CME calculates that as a 65% probability. But again, that is data dependent on the roll call of reports taking place in coming weeks…and what Powell shares with the market on his May 1st press conference.
Here are the key economic reports along with some notes to put them into perspective:
3/28 Core PCE- This is the Fed’s preferred measure of inflation which has been at 2.0% the past two quarters. Even better is the non-core reading for Q4 of 1.8% which is down considerably from the 2.6% showing in Q3. This data should go a long way towards a June rate cut.
4/5 Government Employment Situation: What will be even more important than the number of jobs added will be the reading on Wage Inflation. That was too hot last month at +4.3% year over year. Need to keep seeing this sticky form of inflation become unstuck at this high level. The month over month reading will be helpful in appreciating the pace of decline. Anything over 0.2% monthly increase would point to unwanted inflationary pressures from wages.
4/10 Consumer Price Index (CPI): This has been nicely on the decline over the past year, but last month was a tad higher than expected at 3.8% core inflation with 0.4% monthly increase. This needs to start moving under 3% in coming months to improve odds of a cut on the way.
4/10 FOMC Minutes: Its hard to imagine more details emerging than the voluminous comments that Powell made at the March 20th press conference. Yet you can imagine that investors will pick over every word to find any clue that would point to a likely starting line for rate cuts.
4/11 Producer Price Index (PPI): The least followed of the 3 main inflation reports, but what many economists appreciate as the leading indicator of where the other reports will trend in time. Note that this is already on target at 2% and portends well for the continued reduction in PCE and CPI towards that desired level.
5/1 Fed Meeting: 2pm ET is when the press release comes out. And 2:30pm is the even more important press conference with Powell where we get a lot more color commentary. Given the facts in hand investors are right to highly doubt the rate cut is happening at this time. The real key is if they showed improved language that June is in play.
Trading Plan
We are in a bull market. This is a shock to no one.
What is unclear is the pace of forthcoming gains when we are already up 50% in just 1.5 years time. Please remember that closer to 8% annual gains is the expected normal return.
I suspect 5,500 is the top of the S&P 500 (SPY) this year. Meaning that the catalyst for stocks from a rate hike is pretty much already baked into the cake.
This led me to write my previous article, Investor Alert: “Buy the Rumor, Sell the News!”
The short version is that I would not be surprised with stocks rallying into the rate cut announcement followed by a well deserved round of profit taking. Unfortunately, right around the corner form that sell off…is likely another selloff that coincides with the Presidential election pattern.
As stated before, this is not a reason to get bearish or conservative. Best to assume bull market and general upside til proven otherwise. The key is WHAT stocks will see the most gains.
We know that growth stocks generally lead the parade in the early stages of a new bull market. This is especially clear from where gains rolled in back in 2023.
What happens after a growth oriented phase is a return to value. This makes investors work a little harder to find attractive opportunities. This is where the thorough 118 factor review of our POWR Ratings model comes in quite handy.
The model does the heavy lifting by doing this deep dive into the fundamental attractiveness of the firms. The top 5% are A rated which explains why it has produced a +28.56% average annual return going back to 1999 (nearly 4X better than the S&P 500).
That top 5% is the starting point for our stock selection…then continue to drill down from there to find stocks with the most appealing upside potential.
What top stocks are we recommending now?
Read on below for the answers…
What To Do Next?
Discover my current portfolio of 12 stocks packed to the brim with the outperforming benefits found in our exclusive POWR Ratings model. (Nearly 4X better than the S&P 500 going back to 1999)
This includes 5 under the radar small caps recently added with tremendous upside potential.
Plus I have 1 special ETF that is incredibly well positioned to outpace the market in the weeks and months ahead.
This is all based on my 43 years of investing experience seeing bull markets…bear markets…and everything between.
If you are curious to learn more, and want to see these lucky 13 hand selected trades, then please click the link below to get started now.
Steve Reitmeister’s Trading Plan & Top Picks >
Wishing you a world of investment success!
Steve Reitmeister…but everyone calls me Reity (pronounced “Righty”)
CEO, StockNews.com and Editor, Reitmeister Total Return
SPY shares were trading at $523.36 per share on Thursday afternoon, up $0.19 (+0.04%). Year-to-date, SPY has gained 10.45%, versus a % rise in the benchmark S&P 500 index during the same period.
About the Author: Steve Reitmeister
Steve is better known to the StockNews audience as “Reity”. Not only is he the CEO of the firm, but he also shares his 40 years of investment experience in the Reitmeister Total Return portfolio. Learn more about Reity’s background, along with links to his most recent articles and stock picks.
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The bull market continues to rage on with the S&P 500 (SPY) making new highs. That is the past…the question is what does the future hold? That is why 44 year investment veteran Steve Reitmeister provides this updated 2024 Stock Market Outlook to help you carve a path to outperformance the rest of the year. Read on below for the full story.
Tell me if you see the pattern…
2019 Bull Market
2020 Bear Market
2021 Bull Market
2022 Bear Market
2023 Bull Market
Given the above, the logical question on everyone’s mind should be…Will the bear market come back again in 2024?
This led to me record a brand new presentation this week that covers vital topics including:
- How Did We Get Here?
- What Comes Next?
- S&P 500 (SPY) Year End Target
- Trading Plan
- 12 Top Stocks to Buy Now
- And Much More!
Gain access to this vital presentation now by clicking below:
Updated 024 Stock Market Outlook >
Let me pull back the curtain on this presentation just a little more so you can appreciate why now is the perfect time to watch this presentation…
The goal was to give you a running head start to outperform the rest of the year.
First off, we need to appreciate the easy has been made this year given a 46% gain from the bear market bottom.
Second, that many sectors of the market are not just fully valued…but quite overvalued.
So, this means the path to future outperformance is investing in many of the sectors and stocks that have been left behind.
Gladly we have a big advantage with our POWR Ratings model to find healthy growing companies trading at a discount.
Focusing on those stocks has led to a 31% return since the beginning of November vastly outperforming the broader market.
And now I am zeroing in on 12 stocks that have the right ingredients to generate substantial gains the rest of the year.
All this and more awaits you in my new presentation. So, just click below to start watching now:
Updated 2024 Stock Market Outlook >
Wishing you a world of investment success!
Steve Reitmeister
…but everyone calls me Reity (pronounced “Righty”)
CEO StockNews.com & Editor of Reitmeister Total Return
SPY shares were trading at $521.56 per share on Friday morning, down $0.64 (-0.12%). Year-to-date, SPY has gained 10.07%, versus a % rise in the benchmark S&P 500 index during the same period.
About the Author: Steve Reitmeister
Steve is better known to the StockNews audience as “Reity”. Not only is he the CEO of the firm, but he also shares his 40 years of investment experience in the Reitmeister Total Return portfolio. Learn more about Reity’s background, along with links to his most recent articles and stock picks.
The post Updated 2024 Stock Market Outlook appeared first on StockNews.com
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The S&P 500 (SPY) has been on a tear since November 1st when the Fed started to make their dovish tilt opening the door to future rate cuts. Unfortunately they keep not happening and start date keeps getting pushed further and further out. That has many wondering if stocks are getting ahead of themselves setting things up for a fall. Thus a good time to tune into what investment veteran Steve Reitmeister has to say about the market outlook along with his trading plan and top picks to stay ahead of the pack. Read on below for more.
As you likely remember from your English Lit classes, sometimes you have to…”Beware the Ides of March“.
That was 3/15, the date Julius Cesar was assassinated and is often viewed as an important check point for investors at this early stage of the new year.
Overall, there is not much to beware as most signs continue to point bullish. On the other hand, the S&P 500 (SPY) has rallied considerably the past few months where the overall market does seem ripe for at least a modest pullback, if not correction.
That concept and more will be at the forefront of today’s market commentary.
Market Commentary
Last week we contemplated; What Would Cause a Bear Market Now?
To boil it down, there are 2 likely causes of bear markets. First, is a looming recession which drags down earnings and risk taking leading to a thorough trimming of stock prices.
The second bear market precursor is the forming of a stock price bubble that becomes untenable. The last time that happened was back in 2000 with the bursting of the tech bubble. However, even the most ardent value investor would be hard pressed to make any such parallels to current conditions (maybe a few nosebleed AI stocks that deserve a haircut).
Putting those ideas together, there is not much reason to fear any looming bear market forming. On the other hand, there is not tremendous reason for stocks to press significantly higher as I shared in my last commentary: Is the Bull Market Growing Tired?
The main story there is about how the start date for Fed rate cuts keeps getting pushed further and further back. Please remember there was a time that folks expected that to take place in December 2023. Now we are writing off May 1st and HOPING June 12th is the starting line.
Not helping matters was the hotter than expected PPI report on Thursday morning where the month over month reading of +0.6% was twice the level expected.
With that news bond rates climbed and stocks fell on the session. Plus, the odds of a rate cut coming in June was shaved down to 60% when just a few weeks ago the probably was over 80%.
Hate to tell you this my friends, but I would say odds of a June cut is 50% at best…probably lower.
That’s because if the Fed is “data dependent” as they love to tell us, then the most recent data says that inflation is still too high. That includes the Sticky Inflation reading from earlier this week that remains over 4% and not moving fast enough towards the desired 2% target.
This calls into question if June is a real possibility when there is not enough inflation readings in that short stretch to unequivocally believe that high inflation is dead and buried. That is especially true given the Fed’s statements that they would rather cut rates too late than too early as they do not want any smoldering embers of inflation to reignite into a fire.
The most important event on the economic calendar is the March 20th Fed rate decision along with their quarterly Summary of Economic Projections. No one on the planet is expecting a rate cut at this meeting. However, they will scour every word in the report…and every statement and facial expression from Powell at the press conference looking for clues of what comes next.
No doubt someone at the press conference will ask Powell what he meant by the recent statement that rate cuts are “not far” off. Most likely, he walks that comment back with more “data dependent” talk and “better late than early” which clues investors in that even June may be too soon for the rate cut parade.
If true, then that may be the catalyst for the long awaited pullback from these current highs. Nothing scary. Just a healthy 3-5% pullback after the 25% rally from the October 2023 low.
However, there is no law that says that must happen. Instead, investors could just continue to just idle at this red light awaiting the green that eventually will happen when rates do get cut. This would be what you call a consolidation under 5,200 where the market average doesn’t move much…but results in ample sector rotation.
Some call that a “rolling correction” where each sector takes turns being on the outs even as the overall market indices don’t move much. Those sector focused sell offs cause appropriate dips in overripe positions. This is the best way to clear the path for the next healthy bull run.
Long story short, stay bullish. And stay focused on healthy growing companies that are attractively priced. The POWR Ratings continues to be your best friend in finding quality stocks.
More about that in the next section…
What To Do Next?
Discover my current portfolio of 12 stocks packed to the brim with the outperforming benefits found in our exclusive POWR Ratings model. (Nearly 4X better than the S&P 500 going back to 1999)
This includes 5 under the radar small caps recently added with tremendous upside potential.
Plus I have 1 special ETF that is incredibly well positioned to outpace the market in the weeks and months ahead.
This is all based on my 43 years of investing experience seeing bull markets…bear markets…and everything between.
If you are curious to learn more, and want to see these lucky 13 hand selected trades, then please click the link below to get started now.
Steve Reitmeister’s Trading Plan & Top Picks >
Wishing you a world of investment success!
Steve Reitmeister…but everyone calls me Reity (pronounced “Righty”)
CEO, StockNews.com and Editor, Reitmeister Total Return
SPY shares were trading at $510.73 per share on Friday morning, down $2.63 (-0.51%). Year-to-date, SPY has gained 7.45%, versus a % rise in the benchmark S&P 500 index during the same period.
About the Author: Steve Reitmeister
Steve is better known to the StockNews audience as “Reity”. Not only is he the CEO of the firm, but he also shares his 40 years of investment experience in the Reitmeister Total Return portfolio. Learn more about Reity’s background, along with links to his most recent articles and stock picks.
The post Should Investors BEWARE of this Market? appeared first on StockNews.com
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We all appreciate that we are currently in a bull market with the S&P 500 (SPY) making new highs once again this week. However, it is prudent to ponder what could create a bear market as to be on the lookout. That is why Steve Reitmeister shares insights on the 2 main causes of bear markets. And how much of a concern that should be to investors at this time. Read on below for more.
A market that refuses to go down…will inevitably go up
And that simple logic is precisely what we see happening at this stage. Even as the start date for Fed rate cuts gets kicked further down the road, investors just don’t want to lose their grip on the stock market.
This helps explain why the S&P 500 (SPY) pushed to new highs once again on Thursday even as Fed officials are singing in unison about the dangers of cutting rates too soon. One has to assume this positive price trend will stay in place until there is a dramatically negative catalyst.
So that leads to the question…what could derail this bull market?
That will be at the center of today’s discussion.
Market Commentary
One of my favorite investment sayings is:
“It’s a bull market til proven otherwise”
Meaning that the natural gravity of the stock market is to move higher. That helps explain why the average bull market lasts 63 months while the average bear market only 13 months. That is a 5 to 1 advantage in favor of being in a bull market.
Or to put it another way…it is harder to create a bear market than most people realize. So, you really need some extraordinary events to shake stocks off their bullish axis.
When you boil it down there are really just 2 ingredients that create a bear market. Let’s explore both below.
First, and most obviously, is the idea of a recession forming. This lowers the earnings outlook plus reduces risk taking leading to lower PE for each stock. This combination culminates in an average bear market drop of 34% for the S&P 500.
The second reason stems from an equity price bubble that bursts (often with a recession to follow from all that loss of household net worth). The two obvious examples are 1929 and the tech bubble of 2000.
Yes, some might point to the Great Recession of 2008. But that was from an equity bubble in real estate that led to banking failures. That is an interesting situation for sure…but different than stocks being overpriced leading to their eventual fall.
On the recession front the economy continues to clip along at a healthy pace with the GDP Now estimate for Q1 ticking up to +2.5% growth. That is very close to the long term average of +2.7% and certainly does not hint at a recession forming.
Granted, there is always the concern that the Fed overstays their welcome with high rates that begets a future recession. This fear comes from 12 of the last 15 rate hiking cycles ending in recession. However, it does seem like Powell and company are good students of history and are on their way to managing a soft landing that allows them to cut rates before a recession unfolds.
I recently saw that the current PE of the market (20.7) is in the top 5% of all time. That does make one stop in their tracks and consider if we are overvalued.
The counter argument to that is that investors now better understand the risk and reward of the stock market versus bonds and cash. This has led to higher PE’s for stocks over the last 20-30 years making the long term historical standards a bit outdated.
As a counter argument I want to share this PEG Ratio chart going back 30 years:
The PEG ratio is my favorite valuation metric as it says what you are willing to pay for each unit of earnings growth. Meaning that a tech stock growing earnings 20% a year SHOULD have a higher PE than a sleepy utility company with meager 3% earnings growth.
As you can see that the current PEG level for the market is kind of middle of the pack for the past three decades and not a cause for alarm on the valuation front.
Yet there most certainly are groups that are being a bit too richly valued like the Magnificent 7 stocks and some of the “in fashion” AI companies. Interestingly Tesla has already finally fallen from their too lofty heights with shares 40% off their highs. I would like to see some of that profit taking roll to these other names with that money flowing to other worthy companies with more appealing valuations.
Taking it back to the top, it’s a bull market til proven otherwise. And since we just reviewed what could possibly derail the market (recession and valuation) we are on pretty safe footing on that front as well.
Thus, continue to be fully invested in stocks. Just have a greater eye towards value at this time given that there are indeed some overripe stocks due for a fall.
Are you interested in my favorite stocks at this time?
Read on below to discover them now…
What To Do Next?
Discover my current portfolio of 12 stocks packed to the brim with the outperforming benefits found in our exclusive POWR Ratings model. (Nearly 4X better than the S&P 500 going back to 1999)
This includes 5 under the radar small caps recently added with tremendous upside potential.
Plus I have 1 special ETF that is incredibly well positioned to outpace the market in the weeks and months ahead.
This is all based on my 43 years of investing experience seeing bull markets…bear markets…and everything between.
If you are curious to learn more, and want to see these lucky 13 hand selected trades, then please click the link below to get started now.
Steve Reitmeister’s Trading Plan & Top Picks >
Wishing you a world of investment success!
Steve Reitmeister…but everyone calls me Reity (pronounced “Righty”)
CEO, StockNews.com and Editor, Reitmeister Total Return
SPY shares were trading at $514.66 per share on Friday morning, down $0.15 (-0.03%). Year-to-date, SPY has gained 8.28%, versus a % rise in the benchmark S&P 500 index during the same period.
About the Author: Steve Reitmeister
Steve is better known to the StockNews audience as “Reity”. Not only is he the CEO of the firm, but he also shares his 40 years of investment experience in the Reitmeister Total Return portfolio. Learn more about Reity’s background, along with links to his most recent articles and stock picks.
The post What Would Cause a Bear Market Now? appeared first on StockNews.com
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It’s easy to ignore bad news when the S&P 500 (SPY) is making new highs and our net worth is on the rise. Unfortunately it is often at these heights that the first signs of trouble appear…but are hard to see at first. That is why you need to read the latest insights from veteran investor, Steve Reitmeister, as he points to a disconnect between the fundamentals and current stock price action. Read on below for more.
The better than expected PCE inflation report on Thursday led to another rally pushing the S&P 500 (SPY) back towards the highs at 5,100. This represents a hearty 5% return in February. Even better, market breadth improved with smaller stocks coming along for the ride in the final days of the month.
I hate to be the bearer of bad news…but unfortunately the fundamentals are not totally supporting this rampant bullishness. Especially because I don’t believe things get that much better even after the Fed does finally start lowering rates.
Why is that?
And what does that mean for stocks in the weeks ahead?
Get the answers below with my updated outlook and trading plan.
Market Commentary
In my commentary earlier this week I shared the following insight:
We need to start the conversation with this provocative chart from FactSet comparing the movement of the forward S&P 500 EPS estimates versus the stock index:
You will discover that for most of the past 10 years the dark line for earnings is above the price action. Meaning the improvement in the earnings outlook propelled stocks higher. Yet each time we find the stock index climbing above the EPS outlook it comes back down to size like it did in 2022.
If the lessons of history hold true, then it points to 2 possible outcomes.
First, would be a correction for stock prices to be more in line with the true state of the earnings outlook. Something in the range of 10% should do the trick with some of the more inflated stocks enduring a stiffer 20%+ penalty.
On the other hand, stocks could level out for a while patiently waiting for rates to be lowered. This act is a well known catalyst for greater economic growth that should finally push earnings higher getting things back in equilibrium with the index price.
Yes, there is a 3rd case where stocks just keep rallying because investors are not wholly rationale. Unfortunately, those periods of irrational exuberance led to much more painful corrections further down the road. So, let’s hope that will not be the case here.
(End of previous commentary)
However, here is what I left out of that conversation that needs to be added now. Even when the Fed finally starts lowering rates, it may not be as great of a catalyst for earnings growth and share price appreciation as investors currently believe.
Just consider what is happening now. GDP is humming along around normal levels and yet earnings growth is sub-par to non-existent year over year….why is that?
Because difficult times, like a recession, leads to more stringent cost cutting on the part of company management. This lower cost base = improved profit margins and higher growth when the economy expands once again. And yes, that is the prime catalyst for stock price advances.
But note…we didn’t have a recession. And unemployment remains strong. And thus, there was never the major cost cutting phase which ushers in the next cycle of impressive earnings growth which propels stock prices higher.
Or to put it another way, even when the Fed lowers rates…it may have a very modest impact on improved earnings growth because of what I just noted above. And this equates to less reason for stocks to ascend further.
No…this does not equate to the forming of another bear market. As noted earlier, perhaps a correction is in the offing. Or more likely that the overall market stays around current levels with a rotation out of growth stocks towards value stocks.
This is where we get to press our advantage with the POWR Ratings.
Yes, it reviews 118 factors in all for each stock finding those with the most upside potential. 31 of those factors are in the Value camp (the rest being spread across Growth, Momentum, Quality, Safety and Sentiment).
This value bias helps the POWR Ratings out every year leading to it’s average annual return of +28.56% a year going back to 1999. This year we might be able to press our advantage even more as growth prospects dim and the search for value takes center stage.
Read on in the next section for my favorite POWR Ratings value stocks to add to your portfolio at this time…
What To Do Next?
Discover my current portfolio of 12 stocks packed to the brim with the outperforming benefits found in our exclusive POWR Ratings model. (Nearly 4X better than the S&P 500 going back to 1999)
This includes 5 under the radar small caps recently added with tremendous upside potential.
Plus I have 1 special ETF that is incredibly well positioned to outpace the market in the weeks and months ahead.
This is all based on my 43 years of investing experience seeing bull markets…bear markets…and everything between.
If you are curious to learn more, and want to see these lucky 13 hand selected trades, then please click the link below to get started now.
Steve Reitmeister’s Trading Plan & Top Picks >
Wishing you a world of investment success!
Steve Reitmeister…but everyone calls me Reity (pronounced “Righty”)
CEO, StockNews.com and Editor, Reitmeister Total Return
SPY shares were trading at $512.85 per share on Friday afternoon, up $4.77 (+0.94%). Year-to-date, SPY has gained 7.90%, versus a % rise in the benchmark S&P 500 index during the same period.
About the Author: Steve Reitmeister
Steve is better known to the StockNews audience as “Reity”. Not only is he the CEO of the firm, but he also shares his 40 years of investment experience in the Reitmeister Total Return portfolio. Learn more about Reity’s background, along with links to his most recent articles and stock picks.
The post Stock Investors: Why Are You So Bullish??? appeared first on StockNews.com
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We all have Nvidia (NVDA) to thank for the S&P 500 (SPY) finally breaking above 5,000. Truly one of the most impressive earnings announcements in years. Yet the valuation for NVDA, and the rest of the mega cap tech space is getting lofty calling into question whether a bubble is forming. Learn what investing expert Steve Reitmeister thinks about the current state of the market along with his a preview of this top 12 stocks to buy now. Read on below for more.
Artificial Intelligence is all the rage. And nobody is doing better than Nvidia (NVDA). This was on FULL display in their tremendous Wednesday after market earnings beat that lit a fire under stocks on Thursday…especially any tech stocks tied to AI.
This led to an impressive breakout above 5,000 for the S&P 500 (SPY) to close the session at 5,087. But should investors be worried that not all stocks are participating in this rally. Like how the small caps in the Russell 2000 are still in the red this year???
We will discuss that and more in today’s market commentary.
Market Commentary
February has been marked by an ongoing test of the 5,000 level for the S&P 500.
Twice before stocks closed above 5,000 for a short stretch only to fall back below. But there is a sense that this 3rd time is the charm with a further breakout likely on the way.
Yet just like 2023 the gains seem far too isolated in the mega cap tech stocks as can be seen by this year to date chart focused on gains my market cap:
With history as our guide, a healthy bull market has small caps leading the way. That is because these smaller companies typically have superior growth prospects which propels their shares above the pack.
That is why the returns for small caps going back 100 years are typically 20% better than large caps. For clarity this means that if large caps average a 10% return that small caps would be around 20% better at 12% return (not a 30% return).
One theory is to say “the trend is your friend”. And thus investors are best served playing the large cap tech game until the party is over.
Going back to the late 1990’s that was a great idea as long as you sold in early 2000 at the first signs the bubble was bursting. Unfortunately, investors rarely make those prudent moves. Instead, they tell themselves seemingly sound logic like selling when shares get back to previous levels. This flawed thinking leads to disastrous outcomes at the end of bubble as shares can so easily fall 50-80% in fairly short order.
To be clear, I am not saying Mega Caps or AI stocks are as much of a mania as we saw in 1999 for internet stocks. Nvidia and others are profitable companies growing at a phenomenal pace. But their PE nearing 40X earnings is a premium that history points to having very low odds of future success.
Meaning these shares are priced for perfection. Likely they will stay aloft as long as that perfection continues to unfold with each subsequent earnings report. But once there is the first blemish in that earnings outlook, then “watch out below!”.
Note that back in my days at Zacks Investment Research we ran a series of studies looking at the PE and projected growth rates of companies. Most would assume that the higher the expected growth…the higher the returns. And yet it was the exact opposite with the highest growth companies offering the lowest future returns.
That is precisely because of the higher PE and priced for perfection problem noted above. Growth never holds up over time. Whether its industry conditions or stiff competition, at some point the growth party ends. And when it does the stocks implode and PE comes down to size.
My assumption is that most everyone has an allocation to these Magnificent 7 stocks to benefit as long as this AI party lasts. That ownership is either directly in the individual companies or through ownership in SPY or QQQ which is dominated by these shares.
The question is what are you going to do with the rest of your money because it is unwise to have too many eggs in this becoming more fragile basket?
For me it is to lean into my best investing advantage. That being a focus on the proven outperformance from stocks uncovered by our POWR Ratings system.
Analyzing every stock by 118 factors that point to future outperformance is why the coveted A rated stocks have generated an average return of +28.56% per year since 1999. And that outperformance is showing up in spades once again this year.
What top POWR Ratings stocks am I recommending today?
Read on below for the answer…
What To Do Next?
Discover my current portfolio of 12 stocks packed to the brim with the outperforming benefits found in our exclusive POWR Ratings model. (Nearly 4X better than the S&P 500 going back to 1999)
This includes 5 under the radar small caps recently added with tremendous upside potential.
Plus I have 1 special ETF that is incredibly well positioned to outpace the market in the weeks and months ahead.
This is all based on my 43 years of investing experience seeing bull markets…bear markets…and everything between.
If you are curious to learn more, and want to see these lucky 13 hand selected trades, then please click the link below to get started now.
Steve Reitmeister’s Trading Plan & Top Picks >
Wishing you a world of investment success!
Steve Reitmeister…but everyone calls me Reity (pronounced “Righty”)
CEO, StockNews.com and Editor, Reitmeister Total Return
SPY shares were trading at $507.66 per share on Friday morning, up $0.16 (+0.03%). Year-to-date, SPY has gained 6.81%, versus a % rise in the benchmark S&P 500 index during the same period.
About the Author: Steve Reitmeister
Steve is better known to the StockNews audience as “Reity”. Not only is he the CEO of the firm, but he also shares his 40 years of investment experience in the Reitmeister Total Return portfolio. Learn more about Reity’s background, along with links to his most recent articles and stock picks.
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The industrial sector is well-positioned for robust growth and expansion, propelled by consumer demand for industrial products and services, infrastructure development, government backing, and technological advances. Thus, quality industrial stocks Siemens Aktiengesellschaft (SIEGY), AptarGroup (ATR), and Amada Co. (AMDLY) could be ideal buys for potential gains. Read more….
The industrial sector, which includes manufacturing, construction, and more, has a solid footing, with several factors such as technological innovation, sustained consumer demand for industrial products and services, growing investments in infrastructure, and favorable government funding and policies, attributing to the sector’s growth.
Given the industry’s tailwinds, it could be wise to invest in fundamentally sound industrial stocks Siemens Aktiengesellschaft (SIEGY), AptarGroup, Inc. (ATR), and Amada Co. Ltd. (AMDLY) for substantial returns.
Despite labor shortages and continued supply chain disruptions, the manufacturing industry stands sturdy and will continue to witness significant growth in the foreseeable future. Production of industrial goods, including aircraft, automobiles, chemicals, consumer electronics, heavy machinery, oil, and steel, is exceeding pre-pandemic levels.
With the rapid expansion of the manufacturing sector, the industrial machinery industry is poised for significant profitability in the upcoming years. Further, the industry’s prospects are driven by the demand for automation and the modernization of the production process. The industrial machinery market is estimated to reach $777.35 billion in 2028, growing at a CAGR of 7.2%.
The industrial packaging market is also picking pace with the increasing volume of resources and products being transported across various regions. Amid the rigid plastic regulations, more and more companies are engaging and launching new and innovative products in line with the changing demand for sustainable and recyclable industrial packaging.
The industrial packaging market is expected to be valued at $66.27 billion in 2024. The market is further anticipated to grow at a CAGR of 4.7% during the forecast period (2024-2029), resulting in a market volume of $83.45 billion by 2029.
Supportive government funding & policies and numerous technological advancements will further shape industrial manufacturing trends this year and beyond.
Government initiatives, such as the CHIPS and Science Act, which allocates $50 billion for the domestic semiconductor industry, and the Infrastructure Investment and Jobs Act (IIJA), which sets aside $1.2 trillion for transportation and infrastructure, are creating new avenues for the industry players.
The manufacturing sector is notably making a transformative shift from machine-based assembly lines to “smart factories,” using AI, the Internet of Things (IoT), robotics, data analytics, and other advanced technologies. The movement, known as Industry 4.0, is the next stage of the digitalization of manufacturing, fueled by advances in automation and connectivity.
Investor’s interest in industrial stocks is evident from the Industrial Select Sector SPDR Fund’s (XLI) 10.4% returns over the past six months.
Given the industry’s solid growth prospects, investing in fundamentally strong industrial stocks SIEGY, ATR, and AMDLY could be wise for future gains.
Let’s discuss the fundamentals of these stocks in detail:
Siemens Aktiengesellschaft (SIEGY)
Headquartered in Munich, Germany, SIEGY is a leading technology company that emphasizes automation and digitalization worldwide. The company operates through Digital Industries; Smart Infrastructure; Mobility; Siemens Healthineers; and Siemens Financial Services (SFS) segments.
On February 15, 2024, SIEGY supplied 200 VersiCharge wallboxes and an intelligent charging management system to the Portuguese Infinity building, one of the tallest residential sites in Lisbon, Portugal. The contract includes delivery of SICAM Dynamic Load Management, a solution by SIEGY to use grid capacity efficiently.
With this deal, SIEGY is preparing one of Portugal’s tallest buildings for the future of eMobility. The integrated EV (Electric Vehicle) charging solution customized by SIEGY’s engineering and software teams in Portugal allows for dynamic and intelligent on-site charging management.
On February 6, SIEGY and Italian distribution system operator (DSO), Areti announced their collaboration on the RomeFlex project to test the ability to manage congestion and voltage volatility across the stressed power grids of Italy’s capital city. Areti will use SIEGY’s technology to forecast grid congestion and request flexibility on MV and LV grids.
With SIEGY’s expertise and software, Areti is managing challenges related to climate change and ‘the electrification of everything,’ heavily impacting power grids in Italy and all around the world.
Also, on February 5, SIEGY announced the release of a new generative artificial intelligence (AI) functionality into its predictive maintenance solution – Senseye Predictive Maintenance. The new generative AI functionality makes predictive maintenance more conversational and intuitive.
With the new release, SIEGY will make human-machine interactions and predictive maintenance more efficient and faster by enhancing proven machine learning capabilities with generative AI.
For the fiscal 2024 first quarter that ended December 31, 2023, SIEGY’s revenue grew 1.9% year-over-year to €18.41 billion ($19.84 billion). The company’s gross profit rose 3.1% year-over-year to €7.18 billion ($7.74 billion). Its income from continuing operations came in at €2.53 billion ($2.73 billion), up 54.2% from the prior year’s quarter.
In addition, SIEGY’s net income for the quarter amounted to €2.55 billion ($2.74 billion), or €2.99 per share, a 55.7% and 61.6% growth from the previous year’s quarter, respectively. Its free cash flow from continued and discontinued operations was €1.05 billion ($1.13 billion), an increase of 1,118.6% year-over-year.
Street expects SIEGY’s revenue for the third quarter (ending June 2024) to increase 3.9% year-over-year to $21.55 billion. The company’s EPS for the same quarter is expected to grow 38.5% year-over-year to $1.26. Moreover, the company topped the consensus EPS estimates in three of the trailing four quarters, which is impressive.
Shares of SIEGY have surged 21.6% over the past six months and 15.5% over the past year to close the last trading session at $90.71.
SIEGY’s solid fundamentals are reflected in its POWR Ratings. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, each weighted to an optimal degree.
SIEGY has a B grade for Value, Growth, and Stability. It is ranked #3 out of 35 stocks in the B-rated Industrial – Manufacturing industry.
In addition to the POWR Ratings we’ve stated above, we also have SIEGY ratings for Momentum, Sentiment, and Quality. Get all SIEGY ratings here.
AptarGroup, Inc. (ATR)
ATR designs and manufactures a variety of drug delivery, consumer product dispensing, and active material science solutions and services for markets, including pharmaceutical, beauty, personal care, home care, and food and beverage. It operates through Aptar Pharma; Aptar Beauty; and Aptar Closures segments.
On February 9, 2024, ATR’s Aptar Digital Health and Biogen Inc. (BIIB) entered into an enterprise agreement to operate and develop digital health solutions for neurological and rare diseases. Under the agreement, Biogen will transfer ownership of select digital health solutions to Aptar Digital Health.
The new partnership model leverages Aptar Digital Health’s capabilities to assist in the development and operation of new and existing digital health solutions globally. The initial scope of the multi-year agreement covers various indications in neurology and immunology across 15 countries.
On January 19, ATR declared a quarterly cash dividend of $0.41 per share. The payment date for the dividend is February 22, 2024, to stockholders of record as of February 1, 2024.
ATR pays an annual dividend of $1.64, which translates to a yield of 1.19% at the current share price. Its four-year average dividend yield is 1.27%. Moreover, the company’s dividend payouts have increased at a CAGR of 3.8% over the past three years. Aptar has raised its dividends for 30 consecutive years.
During the fourth quarter that ended December 31, 2023, ATR’s net sales increased 5.3% year-over-year to $838.48 million. Adjusted net income attributable to ATR rose 28.6% and 27.4% from the prior year’s quarter to $81.45 million and $1.21 per share, respectively. Its adjusted EBITDA was $179.45 million, up 22.3% year-over-year.
In addition, the company’s free cash flow came in at $138.49 million, an increase of 40.3% from the previous year’s period.
Analysts expect ATR’s revenue and EPS for the first quarter (ending March 2024) to increase 3.9% and 20.8% year-over-year to $893.45 million and $1.15, respectively. Furthermore, the company has surpassed the consensus EPS estimates in each of the trailing four quarters.
ATR’s stock has gained 13.1% over the past six months and 24.2% over the past year to close the last trading session at $137.50.
ATR’s bright prospects are reflected in its POWR Ratings. The stock has an overall rating of B, equating to a Buy in our proprietary rating system.
The stock has a B grade for Growth, Quality, Stability, and Sentiment. ATR is ranked #4 among 19 stocks in the B-rated Industrial – Packaging industry.
Click here to access all ATR’s ratings.
Amada Co. Ltd. (AMDLY)
Based in Isehara, Japan, AMDLY manufactures, sells, leases, repairs, maintains, checks, and inspects metalworking machinery, software, and peripheral equipment in Japan, North America, Europe, Asia, and internationally. The company offers sheet metal fabrication machines, including laser machines and punch & laser combination machines.
On October 4, 2023, AMDLY announced the three-dimensional laser integrated system, “ALCIS-1008e,” at Photonix 2023. The ALCIS (Advanced Laser Cube Integrated System) is a three-dimensional laser integrated system that can perform various types of laser machining like cutting, welding, and layered manufacturing, all in one machine.
With the new system, AMDLY can support the high-speed and high-quality processing of highly reflective materials such as copper, for which demand is increasing. The system provides high-precision laser machining to meet the needs of highly variable manufacturing.
On September 5, AMDLY commenced the sales of its new products in the HRB series of next-generation large press brakes. These machines expand the range of possible processing by enabling the bending and deep bending of thick sheet metal and large items.
The new HRB series products expand the large-scale machine range to seven models, with support for long and med-to-thick material from 350 tons/3 meters to 600 tons/7 meters. It enables support for steel material processing and also considers environmental concerns.
In the nine months that ended December 31, 2023, AMDLY’s sales revenue increased 10.2% year-over-year to ¥285.22 billion ($1.90 billion), while its gross profit rose 10.9% from the prior year’s period to ¥125.90 billion ($838.18 million). Its operating profit came in at ¥40.25 billion ($268 million), up 15% year-over-year.
Furthermore, the company’s net income and earnings per share amounted to ¥28.01 billion ($186.48 million) and ¥81.51, indicating increases of 16.5% and 17.9% year-over-year, respectively.
As per the company’s updated guidance for the fiscal year 2023, AMDLY’s sales revenue is expected to be ¥395 billion ($2.63 billion). The company expects gross profit of ¥175 billion ($1.16 billion) and net income of ¥39 billion ($259.64 million).
Street expects AMDLY’s revenue for the fiscal year (ending March 2024) to increase 96.7% year-over-year to $2.66 billion. In addition, the company has surpassed the consensus revenue estimates in three of the trailing four quarters.
Over the past six months, the stock has gained 17.8% to close the last trading session at $40.51.
AMDLY’s POWR Ratings reflect its promising outlook. The stock has an overall rating of A, which translates to a Strong Buy in our proprietary rating system.
The stock has an A grade for Value and a B for Quality and Stability. Within the A-rated Industrial – Machinery industry, AMDLY has topped the list of 80 stocks.
Click here to access additional ratings of AMDLY for Growth, Momentum, and Sentiment.
What To Do Next?
43 year investment veteran, Steve Reitmeister, has just released his 2024 market outlook along with trading plan and top 11 picks for the year ahead.
SIEGY shares were unchanged in premarket trading Monday. Year-to-date, SIEGY has declined -1.02%, versus a 5.09% rise in the benchmark S&P 500 index during the same period.
About the Author: Mangeet Kaur Bouns
Mangeet’s keen interest in the stock market led her to become an investment researcher and financial journalist. Using her fundamental approach to analyzing stocks, Mangeet’s looks to help retail investors understand the underlying factors before making investment decisions.
The post 3 Industrial Stocks With Future Gains for Investors appeared first on StockNews.com
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The S&P 500 (SPY) continues to dance around 5,000. However, many market commentators are wondering when these large caps are going to hand over the reins to small caps after a 4 year advantage. Lets remember that going back 100 years there is a clear and decided advantage in smaller stocks. Discover what Steve Reitmeister predicts in the coming year including a preview of this top 12 stocks to buy now. Read on below for more.
Should stocks break above 5,000 for S&P 500 (SPY) now?
No…that is not very logical as the start date for Fed rate cuts keeps getting pushed further and further into the future. However, it is an important lesson to appreciate that when you are in a bull market, it is best to just stay invested as you never know when the next bull run will take place.
Meaning that more and more the evidence confirms that market timing is a “fools’ errand“. So, the wise thing to is simply stay bullish during bull markets.
That doesn’t mean that every stock will go up. So, let’s spend our time today discussing the stocks that have the best chance to outperform in 2024.
Market Commentary
This was an interesting week for the market. After 2 straight sessions breaking above 5,000, stocks were sent reeling on Tuesday’s much hotter than expected CPI report which pushed out the likely start date for rate cuts.
The -1.37% decline for the S&P 500 was pretty rough. But even more brutal was the -3.96% slashing of small caps.
This “seemed” to set the stage for a consolidation period under 5,000 and perhaps a stiffer 3-5% pullback as investors await a clearer signal to move ahead. Yet on Wednesday investors obviously got a case of amnesia as stocks closed the session at 5,000.62. And then Thursday pressed further higher to 5,029.73.
If you want a narrative to explain this, then it could be twisted that the much weaker than expected Retail Sales report on Thursday should help with the inflation problem. However, that doesn’t hold much water when GDPNow estimates still call for +2.9% growth in Q1.
That is a touch too hot for Fed’s liking. Meaning these are above trend growth levels for the US economy that bring it with it more inflationary pressures.
No doubt the Fed would prefer a true “soft landing” reading closer to 1% GDP growth that would come with greater moderations of inflationary pressures.
This brings us back to the “animal spirits” part of investing:
Bull markets will be bullish…and bear markets will be bearish.
No one is arguing that we are not in a bull market right now. So, no matter how logical it might seem for the recent stock advance to simmer down until the timing of Fed rate cuts is clearer…it is also unwise to bet against that primary bullish trend.
To sum it up…stay bullish until there are concerns of recession that would increase the odds of a recession forming.
With that being said, I will stick to my earlier prognostications for 2024 that there is not a tremendous amount of upside for the S&P 500 after the tremendous gains the past 17 months from the October 2022 lows. Instead, the large caps, and in particular the Magnificent 7 mega caps, that dominate the index are fully valued to overvalued by most objective standards.
I suspect that 5,250 (about 10% above the 2023 close) is a generous upside for the market this year. Instead, I foresee the 4 year advantage for large caps over their smaller peers is going to end.
This tide started to turn during the late 2023 rally. Yet as the calendar flipped to 2024 investors got back to their old habits.
That being a concentration in the Magnificent 7 stocks that has mega caps pulling way ahead of the pack. This is on clear display in the chart below:
The good news is that this past week small caps are taking the baton to lead the stock investing race. And yes, Mega caps pressed pause at the same time.
My gut continues to believe strongly that this recent trend has legs. That investors will have to look farther and wider to find stocks worthy of more upside.
This will lead them to small and mid caps that have impressive growth prospects. The key being much more reasonable valuations than their large cap peers. The combination of superior growth + attractive valuation = greater upside potential.
This investing playbook is at the very heart of the way I am managing my portfolios this year. And gladly leans into the strength of our POWR Ratings system.
This quantitative system analyzes 5,300 stocks by the same 118 factors. Meaning it can analyze the fundamental and price action merits of Apple and NVIDIA by the same yardstick it can measure a $500 million market cap “under the radar” selection.
Indeed, it is that daily analysis of 118 different factors for every stock that unearths those with stellar growth and value characteristics that points to future outperformance. And thus, why this POWR Ratings performance chart dating back to 1999 speaks for itself:
Which top rated POWR Ratings stocks am I selecting at this time?
Read on below for the answers…
What To Do Next?
Discover my current portfolio of 12 stocks packed to the brim with the outperforming benefits found in our exclusive POWR Ratings model. (Nearly 4X better than the S&P 500 going back to 1999)
This includes 5 under the radar small caps recently added with tremendous upside potential.
Plus I have 1 special ETF that is incredibly well positioned to outpace the market in the weeks and months ahead.
This is all based on my 43 years of investing experience seeing bull markets…bear markets…and everything between.
If you are curious to learn more, and want to see these lucky 13 hand selected trades, then please click the link below to get started now.
Steve Reitmeister’s Trading Plan & Top Picks >
Wishing you a world of investment success!
Steve Reitmeister…but everyone calls me Reity (pronounced “Righty”)
CEO, StockNews.com and Editor, Reitmeister Total Return
SPY shares were trading at $500.82 per share on Friday morning, down $1.19 (-0.24%). Year-to-date, SPY has gained 5.37%, versus a % rise in the benchmark S&P 500 index during the same period.
About the Author: Steve Reitmeister
Steve is better known to the StockNews audience as “Reity”. Not only is he the CEO of the firm, but he also shares his 40 years of investment experience in the Reitmeister Total Return portfolio. Learn more about Reity’s background, along with links to his most recent articles and stock picks.
The post Are Small Cap Stocks Ready to Lead? appeared first on StockNews.com
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The S&P 500 (SPY) continues to impress on this recent bull run. Yet the level of 5,000 is nearly 50% above the bear market lows and many value investors are saying that stocks are getting expensive. So will stocks race above 5,000 or will this level prove to be a long red light? 43 year investment veteran Steve Reitmeister shares his views in the commentary below along with a preview of this top 12 stocks to buy at this time.
There is no surprise that the market is flirting with 5,000 for the S&P 500 (SPY). Just too attractive of a level not to attain at this time.
The problem is that this is a very hollow rally like we saw for the majority of 2023 where almost all the gains were accruing to the Magnificent 7 mega cap tech stocks.
Unfortunately, the vast majority of stocks are actually in the red which can best appreciated by the loss for the Russell 2000 index in the new year.
Let’s discuss what this means for the market outlook and how we still chart a course to outperformance in the days and weeks ahead.
Market Commentary
Thursday offered the first attempt for stocks to break above 5,000. In fact, the index got to 4,999.89 late in the session before resistance kicked in.
Friday was much the same floating just below that 5,000 level. Taking little shots here or there. Yet at the close it fell short once again.
In the long run stocks will climb well above 5,000 as most bull markets last over 5 years and we are still at the very early stages of this bullish phase. That is not the current contemplation. Rather it is about how long it will take to breakout above 5,000?
I explored this concept in my previous article: Are Stocks Stuck til Summer?
The answer to the above question is YES…I think that 5,000 will prove to be a solid lid on stock prices until the Fed starts lowering rates.
No…I am not calling for a correction like some commentators. Perhaps a 3-5% pullback ensues then we play in a range of 4,800 to 5,000 until we get a green light from the Fed on lower rates. This is what would give investors a good reason to step on the gas pedal attaining new highs above 5,000.
Right now, I sense we will just be idling at a red light. Changing the radio station. Sneaking a quick peek at our phones. Staring at people in other cars. Etc.
But once the Fed lowers rates it means more rate cuts are to follow which increases economic growth > earnings growth > stock prices. On top of that lower bond rates makes stocks the more attractive investment by comparison.
This chain of events is the clear green light for stocks to race ahead. Until then I think that many will be worried about how long the Fed will sit on their hands. Many are already surprised they have waited this long.
Then again, when you look at the Fed’s long term track record where 12 of 15 rate hike regimes have ended in recession, then you start to appreciate that these guys often overstay their welcome with rate hikes.
Let’s not forget that there are also 6-12 months of lagged effects on their policies so even if the economy looks OK at the time that rates are cut it is still possible for a recession to form.
That is not my base case at this time. I do sense that this Fed has a better appreciation of history and is managing the dual mandate of moderate inflation and full employment quite well. Meaning that I suspect a soft landing is the most likely outcome, followed by acceleration of the economy…corporate earnings…and yes, share prices.
The point is that the Fed policies are at the center of investment equation at this time. And the key to understanding what the Fed will do is keeping an eye on economic developments. In particular, inflation and employment metrics.
Right now, employment is quite healthy…maybe too healthy for the Fed’s liking. Not just the surprisingly high 353,000 jobs added last month, but also the eerily high wage inflation readings that spiked up to 4.5% year over year.
No doubt the Fed is not fond of this sticky form of wage inflation and would like to see more easing of that pressure before they start lowering rates. The next reading of wage inflation will be on Friday March 7th.
Before that time, we will get the next round of CPI (2/13) and PPI (2/16) inflation readings. Those have been moving in the right direction for some time. In fact, PPI is the leading indicator for the more widely followed CPI, was all the way down to 1% inflation rate at last months reading.
For as good as that is, the Fed is not as fond of CPI and PPI as traders are. They prefer readings from the PCE inflation reading which doesn’t come out til 2/29.
But really they have even more sophisticated ways of reading inflation which can better be appreciated by the Sticky-Price CPI monitoring done by the Atlanta Fed.
As the chart below shows, Sticky Inflation (orange line hovering around 5%) is, well, too darn sticky at this time. Meaning that academics and economists at the Fed are likely concerned that inflation is still too persistent and that more patience is required before lowering rates.
To sum it up, I suspect that 5,000 will prove to be a point of stiff resistance for a while. This should lead to an extended trading range period with investors awaiting the green light from the Fed to start lowering rates.
Yes, it is always possible for stocks to race ahead without this clear go ahead by the Fed. That is why its wise to stay in a bullish posture to enjoy the gains whenever they unfold.
I am saying to just not be that surprised if we don’t continue to rise given 3 straight months of very bullish conditions coupled with facing an obvious place of stiff psychological resistance at 5,000.
At this stage the Magnificent 7 have had their fun. I wouldn’t be surprised if some profits are taken there and shifted to smaller stocks. What you might call a sector rotation or change in leadership. There was some good signs of that starting to be the case on Thursday as the Russell 2000 rose +1.5% on the session while the large cap focused S&P 500 hovered around breakeven.
Also, I suspect there will be a greater eye towards value as many market watchers are pointing out that earnings growth is muted and thus at this level the overall market is pretty fully valued. That is especially true for the Magnificent 7 that no value investor could stomach their exorbitant multiples.
This too calls for a rotation to new stocks that are more deserving of higher prices. It is precisely these kinds of “under the radar” growth stocks trading at reasonable prices that I cherish.
To discover which ones I am recommending in my portfolio now, then read on below…
What To Do Next?
Discover my current portfolio of 12 stocks packed to the brim with the outperforming benefits found in our exclusive POWR Ratings model. (Nearly 4X better than the S&P 500 going back to 1999)
This includes 5 under the radar small caps recently added with tremendous upside potential.
Plus I have 1 special ETF that is incredibly well positioned to outpace the market in the weeks and months ahead.
This is all based on my 43 years of investing experience seeing bull markets…bear markets…and everything between.
If you are curious to learn more, and want to see these lucky 13 hand selected trades, then please click the link below to get started now.
Steve Reitmeister’s Trading Plan & Top Picks >
Wishing you a world of investment success!
Steve Reitmeister…but everyone calls me Reity (pronounced “Righty”)
CEO, StockNews.com and Editor, Reitmeister Total Return
SPY shares rose $1.33 (+0.27%) in premarket trading Friday. Year-to-date, SPY has gained 5.12%, versus a % rise in the benchmark S&P 500 index during the same period.
About the Author: Steve Reitmeister
Steve is better known to the StockNews audience as “Reity”. Not only is he the CEO of the firm, but he also shares his 40 years of investment experience in the Reitmeister Total Return portfolio. Learn more about Reity’s background, along with links to his most recent articles and stock picks.
The post 5,000 Green or Red Light for Stocks??? appeared first on StockNews.com
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Stocks have been pressing lower of late as the bond rates continue to rise. This had the S&P 500 (SPY) dangerously close to the 200 day moving average. Yet hidden in the Friday Government Employment report was a clue that sparked a rally and maybe puts an end to recent market weakness. Read on below for full details….
Right now the most important thing on investor’s minds is the dramatic rise in bond rates, and how that makes stocks less attractive. I tackled that subject pretty thoroughly in my previous commentary this week. Be sure it read now if you haven’t already:
When is the Stock Bouncing Coming?
The quick answer to the above question, is that the bounce could be forming now as stock flirt with the 200 day moving average at 4,206 for the S&P 500 (SPY). That is the red line in the chart below.
On the fundamental front, if rates keep ripping higher, then it will only put more pressure on stock prices. I sense that 5% is a logical top for 10 year rates…but who says that the market is logical?
Also note on the fundamental end of things that the economic reports continue to come in positive. Even 20 months into the most aggressive Fed rate hiking regime in history, GDP estimates continue to be robust.
GDP Now has it their Q3 estimate all the way up to +4.9% bolstered by the most recent ISM Manufacturing report. Further, the Blue Chip Economist panel sees +2.9% as the more logical growth trajectory.
If I were to place a bet in Vegas I would say the Economists are much closer to the final number. Regardless, it is hard to look at these results and see a recession coming…and therefore it is hard to be truly bearish.
On top of that the Government Employment Situation report came out Friday morning much hotter than expected. Since so much of the initial market reaction is based on just reading the headline…then yes stocks sold off early in the session.
Gladly, as prudent investors dug into the details they discovered a hidden gem in the report. That being month over month wage inflation down to only 0.2% which means we are ebbing ever closer to the 2% inflation target for the Fed as this “sticky” form of inflation becomes unstuck at such high levels.
As this new spread…so too did the stock gains. As I put this commentary to rest with 90 minutes left in the Friday session we have a +1.4% result for the S&P 500 and nicely above recently resistance at 4,300.
Back to the big picture conversation about higher rates….
Yes, stock prices are down of late as “rates normalize” to more traditional historic levels. Meaning we are no longer enjoying the artificially low rates we that have been in hand the past 15 years.
Once everyone makes this adjustment to the new world view of rates…and realize the world is not falling apart…they will be compelled to put their money into the best stocks. And maybe Friday’s rally is an early sign of that taking place.
So, which are those best stocks, you ask?
Read on below for the answer…
What To Do Next?
Discover my brand new “2024 Stock Market Outlook” covering:
- Bear Case vs. Bull Case
- Trading Plan to Outperform
- What Industries Are Hot…Which Are Not?
- Top 11 Picks for the Year Ahead
- And Much More!
Gain access to this vital presentation now by clicking below:
Wishing you a world of investment success!
Steve Reitmeister…but everyone calls me Reity (pronounced “Righty”)
CEO, StockNews.com and Editor, Reitmeister Total Return
SPY shares were trading at $430.05 per share on Friday afternoon, up $5.55 (+1.31%). Year-to-date, SPY has gained 13.70%, versus a % rise in the benchmark S&P 500 index during the same period.
About the Author: Steve Reitmeister
Steve is better known to the StockNews audience as “Reity”. Not only is he the CEO of the firm, but he also shares his 40 years of investment experience in the Reitmeister Total Return portfolio. Learn more about Reity’s background, along with links to his most recent articles and stock picks.
The post Investor Alert: Hidden Gem for Stocks Found in Friday Report appeared first on StockNews.com
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