The Asset Guidance Group Monday Outlook for the Week Ahead Starting December 19, 2022

Fed Rate Hikes 2022
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Dow Breaks Immediate Support Dec 2022
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Here’s The Asset Guidance Group Outlook for the Week Ahead… 

The last full trading week of the year features a number of second tier data points,
but investors expect Friday’s PCE Price Index to be the week’s highlight. The Fed’s
preferred inflation gauge fell in October, and further easing may help determine the
scale of future rate increases. FOMC members are once again free to speak to the
press following last week’s meeting, which could influence this week’s macro flows.
The technical setup for U.S. stocks is not ideal heading into year-end (see tweet here).
In the U.S. there’s a deluge of housing data along with consumer confidence,
durable goods orders, and personal income and spending figures. Also keep an eye
out for earnings announcements from Fedex and Nike, each considered
bellwethers in their respective industries. Overseas, the Bank of Japan meets later
today, and while the U.S. dollar’s swoon has taken some pressure off the weak yen,
the central bank is not likely to take any action. In Europe, German producer prices
are expected to diminish further, while consumer and business sentiment reports
round out the region’s light calendar. Monthly Canadian CPI and GDP updates are
also on the international docket. [1]

International:

International markets were also a sea of red.  Canada’s TSX pulled back -2.5%, while the United Kingdom’s FTSE ended down -1.9%.  On Europe’s mainland, France’s CAC 40 and Germany’s DAX retreated ‑3.4% and -3.3% respectively.  In Asia, China’s Shanghai Composite ended the week down -1.2% after six weeks of gains.  Japan’s Nikkei ended the week down -1.3%.  As grouped by Morgan Stanley Capital International, developed markets finished down -1.8% and emerging markets retreated -1.6%.

Commodities: 

Commodities finished the week mixed.  Gold pulled back -0.6% to $1800.20 per ounce, while Silver retreated -1.6% to $23.33.  Oil rebounded 4.8% to $74.46 per barrel of West Texas Intermediate crude.  The industrial metal copper, viewed by some analysts as a barometer of world economic health due to its wide variety of uses, ended the week down -3.0%.  

U.S. Economic News  

The number of Americans filing first-time unemployment claims in early December fell to a nearly three-month low, indicating layoffs around the holiday season remain low even as the economy softens.  The Labor Department reported initial jobless claims fell by 20,000 to 211,000 last week.  Economists had forecast an increase of 1,000.  The number of people applying for jobless benefits is one of the best barometers of whether the economy is getting better or worse. New unemployment filings have gradually risen from a 54-year low of 166,000 last spring, but they are still extremely low.  Forty-one of the 53 states and U.S. territories that report jobless claims showed a decline last week.  New York, Georgia, Texas and California posted the biggest drops.  No states reported a large increase.  [2]

Random Thought/Image of the Week

It is clear that the Federal Reserve is intent on bringing inflation under control with its series of rate hikes.  However, what most people probably don’t realize is the rapidity with which the Federal Reserve has acted already.  The Federal Reserve has hiked interest rates higher and faster than at any in the modern era.  In the current cycle, the Fed has hiked over 3.5% in under ten months.  By contrast, in the hiking cycle from 2004 to 2006, the same move took almost two years (Chart from chartr.co). [3]

Chart of the Week: 

The Dow Jones Industrial Average ($DJI) is the only major index that rallied above the August highs, and early last week was down less than 5% YTD.Yet momentum seemed
to be waning even before the market turning Fed meeting, since last week’s high coincided with a second
consecutive MACD divergence. The RSI also flashed a divergence right before price fell through its volume
Point of Control support and down to the 200-day  exponential moving average. Although it seems the next
leg down has begun, the Dow is still 14% higher than its yearly low, while no other major index is above 10%. Click here to view chart [4]

Sources: [1] tdainstitutional.com; [2] [6] Asset Guidance Group analysis, www.stockcharts.com; All index- and returns-data from Yahoo Finance; news from Reuters, Barron’s, Wall St. Journal, Bloomberg.com, ft.com, guggenheimpartners.com, zerohedge.com, ritholtz.com, markit.com, financialpost.com, Eurostat,0020Statistics Canada, Yahoo! Finance, stocksandnews.com, marketwatch.com, wantchinatimes.com, BBC, 361capital.com, pensionpartners.com, cnbc.com, FactSet; Chart from Indeed’s Hiring Lab; [3] chart from cnbc.com; [4] tdainstitutional.com; [5] grouped and reported by kwanti.com, imported from TDAmeritrade Institutional, Risk categories as scored by Grabbel-Lytton test and grouped by like risk tolerance levels; NOTE: individual account performance grouped solely by model classification type in terms of risk tolerance. Individual portfolios include equivalent equities exposures via like models but many may hold additional invetments like structured notes, fixed income investments such as CDs, bonds, and other invidivually preferred securities. 1-Week risk score denotes overall performance of all AGG client portfolios grouped together by like-risk tolerance scores not by identical investment allocations; [6] SIMON portal, FIGmarketing.com.

Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.

Asset Guidance Group, LLC’s 1-Week Performance by Risk Tolerance Group-Type

Mon 12/12/2022 – Fri 12/16/2022

Conservative Models: +0.39%

Moderate-Conservative: +0.43%

Moderate: +1.06%

Moderate-Aggressive: +1.42%

Aggressive: +1.8% [5]

Structured Notes Performance to Date
Structured Note Performance to Date [6]
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