[Market Outlook] Is The Market on Better Footing Now?

How To Invest (and Win) In This Bearish Environment [Company Logo] Is The Market on Better Footing Now? How To Invest (and Win) In This Bearish Environment By Keith Schneider and Donn Goodman [image] Hello Gaugers. We hope that you had a joyful, relaxing, and nourishing Thanksgiving. During our “grateful” round the table session, I thought about how grateful I was just to enjoy a delicious meal with my family. Unfortunately, many people were not so lucky. This year, according to a poll by PersonalCapital.com, only 74 percent of Americans were expected to celebrate Thanksgiving because 1 in 4 Americans are skipping the holiday to save money… In 2021, researchers noted that an IPSOS survey found that nine in 10 Americans planned to celebrate Thanksgiving. This year, the new poll of 1,000 people found that the number has fallen to just 74 percent. In fact, 47 percent say they are celebrating “Friendsgiving” because of its more budget-friendly menu. Specifically, just 24 percent of Friendsgiving celebrations will have a turkey on the table, with 33 percent opting for a pizza instead! Notice the dramatic rise in the cost of Thanksgiving over the past few years: [image] What a difference a few weeks makes!!! After a brutal September, the stock and bond markets have been positive during most of October and November. So are we in a new bull market? No, Not Yet. As we have mentioned in the past few Market Outlooks, the stock market has performed positively due to a weaker US dollar and lower interest rates. Many of you are also aware that one of our investment strategies moved into TLT (20-year bonds) a couple of weeks ago. [image] We have had a substantial rally, especially in the longer end of the yield curve. Specifically, it has been profitable for our subscribers to be invested in the TLT ETF. After bottoming in late October at around 92, TLT closed at over 102 Friday. That is approximately a 10% return in the 20-year Treasury bonds in less than a month. Clearly, this has been providing a good tailwind for stocks that have rallied along with bonds. See the chart below: [image] However, we are not as optimistic that interest rates will stay in “rally” mode and that the decline in rates will continue. With 2-year interest rates hovering in the mid 4.5% range and 10-year bonds around 3.8%, the inverted yield curve that began in early summer continues. Most economists on Wall Street interpret this as suggestive that we will see a recession in 2023. How badly this economic downturn is anyone’s guess. Additionally, with the Fed expected to continue raising rates, it is highly likely that the Fed’s overnight lending rate will creep up to 5.0% (or higher) in early 2023. Eventually, the severe inversion will close its gap, and longer-term interest rates could be “pulled” back above 4%. On Friday, Goldman Sachs economists suggested that 10-year rates will stay in the 4% range for all of 2023. Positives Remain for Stocks Right Now The stock market is in rally mode. Our indicators continue to be positive (more in Big View below). Many of the technical indicators we follow indicate that the market could continue a move higher. One example is that most of the sectors of the Economic Modern Family have entered short-term bullish phases. See the chart below: [image] Additionally, we have seasonal factors, which we have been sharing with you in the past few Market Outlooks. Specifically, the 4th quarter, after a mid-term election (of a President in their first term) has historically been a positive time to invest in stocks. However, one word of caution, most of the periods considered in this statistic did not have high inflation and rising interest rates as headwinds. Nonetheless, see the chart below indicating the favorability of this season: [image] Should We Stop Playing Defense and Get Aggressive Now? NO, NO, NO! There are very opportunistic ways to invest right now, and we’ll cover them below, but first, it’s important to recognize that it’s not yet time to be “aggressive,” and it’s important to acknowledge the risks of being in stocks, bonds, and other asset classes considering the economic headwinds. Most economists from the largest firms on Wall Street have recently commented that we may only be 1/3 into this economic slowdown, and the next 2/3 will come in the first half of 2023. Prompted by discussions about monetary policy, many of these economists believe that 1) The Fed is not done raising rates, and 2) Inflation remains elevated and not going to hit the Fed’s 2% target anytime soon, and 3) Higher labor, manufacturing, and borrowing costs will certainly slow the economy down. As a result, a profit recession from many public companies should be expected, especially by companies that are multinational and affected by the dollar. These factors will negatively impact earnings, and the market will have to readjust. Typically, in this environment, stock multiples contract, leading to lower stock prices. We’re focused on the fact that this may be ‘the next shoe to drop.’ Click below to continue reading about - 9 economic indications that a recession is here or near - How to invest (and win) in the current bearish environment - Our BigView text and video analysis of the outlook for the short-term and long-term market action [Click here to continue to the FREE analysis and video.]( [Click here to continue to the PREMIUM analysis and video](). Best wishes for your trading, Keith Schneider CEO MarketGauge P.S. When you’re ready, here are 3 free ways we can help you reach your trading goals… - [Book a call with our Chief Strategy Consultant](), Rob Quinn. He can quickly guide you to the resources that you'd like best. - Get the foundational building blocks of many of our strategies from Mish's book, [Plant Your Money Tree: A Guide to Building Your Wealth](, and accompanying bonus training. - [Review quick descriptions]() of our indicators, strategies, services and trading systems here. Get more - follow us here... Twitter [@marketgauge]() and [@marketminute]( and [Facebook]() To stop receiving this go [here.]() Got Questions?Office hours 9-5 ET (New York time) Email: info@marketgauge.com Live Chat: Go to bottom right corner of our [home page.](=) Call: 888-241-3060 or 973-729-0485 There is substantial risk of loss associated with trading any securities including and not limited to stocks, ETFs, futures, and options. Only risk capital should be used to trade. Trading securities is not suitable for everyone. No representation is being made that the use of this strategy or any system or trading methodology will generate profits. Past performance is not necessarily indicative of future results. To unsubscribe or customize your email settings, [click here](). "Market Intelligence at a Glance + Tools For Serious Traders" [Unsubscribe]( MarketGauge.com 70 Sparta Ave, Suite 203 Sparta, New Jersey 07871 United States (888) 241-3060