The Asset Guidance Group Monday Outlook for the Week Ahead Starting Monday Sep 19, 2023 Click Chart to Enlarge Here’s The Asset Guidance Group Outlook
A potential fiery week lies ahead with central bank decisions in the U.S., Europe,
and Australia, along with the latest U.S. employment data. For the FOMC, even
though the bond market continues to sound recession alarms, recent economic
data like the S&P Global Flash PMIs suggests a resurgence in demand, and inflation
and the labor market are not slowing nearly quickly enough to warrant a policy
pivot. On Wednesday, Chair Powell is likely to keep his options open after a
quarter-point raise and reiterate no rate cuts for this year. In Europe, whether the
ECB hikes by 25 or 50bps on Thursday may hinge on Tuesday’s CPI report, where a
modest deceleration is expected. Australia’s central bank is anticipated to hold
rates steady on Tuesday after a tamer inflation report last week. Back in the U.S.,
it’s also time for labor market updates, with JOLTS job openings on Tuesday, ADP
private payrolls on Wednesday, and the government’s monthly release on Friday.
April’s non-farm payrolls are expected to be lighter versus the prior month but to
still expand by 180K. Other U.S. events of note include ISM PMIs, factory orders,
Q1 unit labor costs, and consumer credit. Overseas, China’s April PMIs were due
to be released over the weekend, while EU retail sales and Germany’s factory
orders round out the international docket. 
U.S. equities recovered from an early week decline after stronger-than-expected large-cap technology company earnings and an uneventful inflation report. The S&P500 Index rose 0.9%, while the Nasdaq Composite gained 1.3%. The Russell 2000 fell 1.25% after a dismal earnings report from First Republic Bank renewed systemic concerns in the financial sector. Six of 11 S&P500 sectors managed gains, led by
communications and technology. Crude oil dropped another 1.5% despite a Friday
rally as global growth fears weighed. U.S. Treasury yields rose at the short end but fell at the long end after March’s Core PCE Price Index reflected price increases that continue to slow but at a snail’s pace. The services sector continued to be the driving force for inflation, and the Q1 Employment Cost Index came in slightly above
expectations at +1.2%. Annual U.S. wage growth was 5.1%, still well above the Fed’s
comfort level of 3.5% that would be consistent with their intended 2% inflation target.
Although the first reading of Q1 GDP was lower than forecasts at +1.1%, the
slowdown was mostly attributed to weak inventory investment. Consumer
spending was much stronger than the prior quarter at +3.7%, and overall,the data and fed funds futures point towards at least one more rate hike. In other news, U.S.
consumer confidence fell in April to a nine-month low, while durable goods orders
increased marginally in March excluding a large jump in aircraft contracts. U.S.
pending home sales tumbled in March, but the low inventory led to a surge in new home sales. Internationally, the Eurozone narrowly avoided contraction in Q1, with GDP expanding by just 0.1%, while Germany’s April inflation figures ticked lower but
remained well elevated at +7.2% YoY. The Bank of Japan left policy unchanged but
pledged a “broad-perspective review” of easing measures. Tokyo’s CPI rose 3.5%
YoY in April, and core prices remained lofty at +2.3% YoY. 
The Nasdaq-100 Index (NDX) has been flirting with technical resistance at $13,200 for the past month, but the strength shown last week on positive
earnings reports from Meta and Microsoft could be enough to push it through. NDX has rallied 20% YTD and is closing in on the 50% retracement from last year’s. entire drop, near $13,600. That price
level also lines up with the highs from August, creating a potential price target if it finally eclipses the current
resistance. When NDX first arrived at $13,200 this year it did so along with a MACD divergence, indicating weakness and higher likelihood of a pullback. With that retracement behind it, ideally MACD should confirm a breakout with a corresponding higher high. That could happen this week, but as always be watching for signs of failure as last week’s low should not be breached.
Sources:    tdainstitutional.com tdainstitutional.com; Any performance data reported by Asset Guidance Group, LLC has been grouped and reported by kwanti.com, imported from TDAmeritrade Institutional, Risk categories as scored by Grable-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 investments like structured notes, fixed income investments such as CDs, bonds, and other individually 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;   Macro Monday (tdainstitutional.com);
*All other 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.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.
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