Santa Isn't Coming To Town🎅
The Odds For A Santa Rally Fade Away
- The odds of a so-called "Santa Rally" leading dropped before the year's end as all of the main indices, including the Dow Jones and Nasdaq, saw the second week of losses.
- In the face of inflation that has remained stubbornly high, the FED, ECB, and BOE have maintained their hawkish positions. FED's 50 basis point rate increase was no surprise because it was widely anticipated. And their prediction that the Fed Funds rate will probably reach 5.1% in 2023 and then be maintained there for a while shouldn't have come as a surprise, given that Fed Chair Jerome Powell and other FED members had already made similar predictions in speeches and comments over the previous few months, not to mention at their November meeting.
- It would be highly beneficial for the economy and the market if inflation. Still, the economy slowed down but continued to grow, and we kept creating jobs, albeit perhaps more slowly and with slower pay increases.
Source: Photo by Alexander Grey on Unsplash
Asian Stocks Are Well-positioned To Thrive in 2023
- Asian stocks may rise in 2023 due to the Chinese economy picking up and pressure on the dollar. Based on survey predictions from 11 strategists obtained by Bloomberg, analysts anticfollowinged a 9% increase until the end of the next year.
- There are more prospects for profit because Covid-19-induced Chinese lockdowns are ended, and chip downcycle weaknesses are reversing. These factors and the weakening US currency mayshortly profitable investments in the near future.
Housing Market News:
- Due to the higher borrowing prices brought on by the FED's restrictive monetary policies, the ng sector is currently experiencing a recession. The housing and homebuilding industries have recently performed poorly, and the data described above that will be revealed this week is not likely to demonstrate any improvement in building fundamentals.
- The housing market's difficulties, along with the Treasury market yield curve's ongoing inversion and the decline in oil prices due to potential demand concerns, all point to the US entering a recession in 2023.
Source: Photo by Tom Rumble on Unsplash
- Argentina's annual inflation rate is anticipated to reach 99% this month. According to economists, it may soon hit triple digits. Inflation was 176% in 1978 when Argentina hosted the World Cup and won the title. The rate was 116% in 1986 when Diego Maradona led Argentina to victory.
- The eagerly anticipated Mac Pro with Apple's Silicon chip has been postponed. The company's updated production and chip design plans are to blame. Apple also permits sideloading and third-party app shops most significant
- One of Friday's greatest gainers was Meta's stock after JP Morgan changed their recommendation to overweight from, unfortunately, neutral. Meta's year-to-date decline is still 65%.
- Following Adobe's disclosure that its quarterly results and guidance exceeded expectations, $ADBE shares increased.
Source: Yahoo Finance
If the economy falls into a recession in 2023, it might make what is already anticipated to be a bad year for Corporate America even worse. The Wall Street consensus predicts negative earnings growth for S&P 500 companies in the upcoming year, which would likely cause valuations to decline.
I believe the optimal investment approach in this environment is a portfolio consisting primarily of high-quality equities and cash, with investments in businesses with a track record of generating consistent earnings and cash flow while keeping their dividends during challenging economic times.