[TradeSmith Daily]( Time to Buy Stocks
Everyone expected a ânon-moveâ from Federal Reserveâs last meeting. Investors got what they wished for — the Fed held the line on interest rates. What investors also wished for — but didnât get — was clarity on what comes next. And weâre all left wondering: âWhen will rate cuts begin?â âAs is too often the case when it comes to âFed-speak,â we came away from one of the central-bankâs policy meetings with a forward view thatâs confusing — if not downright contradictory,â Quantum Edge Pro Editor Jason Bodner told me. The Fed says the economy is healthy and expanding (which is good for stocks)… but that growth may be so strong that rates will need to stay âhigher for longerâ (which could be bad for stocks). Then thereâs inflation. The Fed acknowledged that pricing pressures are down, and the data shows it looks more like we have been racing down the mountain with lower inflationary levels:
And, yet, the Fed says it wants to see âmore progress.â âI get the concept of transparency and not wanting to be secretive,â Jason told me. âBut this lack of clarity is a catalyst for the very speculation it tries to avoid. Despite the good intentions.â Hereâs the bad news/good news of it all. The bad news: This lack of clarity has left most investors in a state that Jason refers to as âPost-Fed confusion.â The good news: This confusion has created the best buying window weâve seen in months — with great companies trading at bargain levels. And Jason knows exactly what move to make next. Because as heâs [been sharing since August]( a âBig Liftâ is almost here that will send stock prices higher. Making now the time to buy stocks. RECOMMENDED LINK [The No. 1 AI Stock of 2023 (Not Nvidia)](
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[Click here for the name and ticker]( Three âSignalsâ That Tell Us Stocks Are Headed Higher
While âFed-speakâ feeds into âparalysis by analysisâ — causing investors to make a lot of costly mistakes — in Jasonâs [Quantum Edge services]( members are already positioning themselves for higher stock prices and bigger profits. And itâs the data — not some myopic crystal ball — that says so. Indeed, Jason has three specific signals (data points) that tell us so: Signal No. 1: Plummeting Inflation The data is clear. Inflation has dropped from above 9% last summer to 3.7%. Jason says it gets really interesting when you add a trendline to this bit of analysis. The Fedâs âidealâ target for inflation is 2%. And the trendline below is taking us there:
And, by the way, Jason says that 2% Fed-target inflation rate is a unicorn — it only exists as a bit of stock-market mythology. âI ran a personal study on the consumer price index — going all the way back to its 1960 creation. The average reading over the last 63 years is 3.77%. Thatâs nearly double the 2% goal — and itâs right where inflation is now,â Jason told me. Jason says that level of inflation certainly wasnât harmful to stocks: The S&P 500 has gained more than 46,000% during that studied 63-year span. He also points out that most of the CPI surge has been powered by spiking oil and energy prices, which are notoriously volatile. That trend of lowering inflation remains intact. Signal No. 2: The Economy Keeps Humming Along When the Fed launched its inflation fight, the largest fear was that its âhike-at-all-costs strategyâ would send the United States into a full-blown recession. That fear is legitimate. But weâre also seeing an economy that isnât buckling under the pressure… In fact, itâs even stronger than many have anticipated. U.S. applications for unemployment benefits fell to the lowest level in nearly eight months, consumer spending increased the most in six months in July, and GDP growth in the first two quarters of 2023 is up compared to the same time last year:
And, most relevant to investing in stocks, companies continue to make money. Signal No. 3: The Raging Bull Market August and September have been choppy. But the S&P 500 remains in a bull market — up more than 20% from their Octoberâs lows.
âThe analysts and strategists who are supposed to be market seers have been wrong about this yearâs strength in stocks and are now playing catch up — and are boosting their year-end targets for the for the S&P 500,â says Jason. Putting it all together, Jason is confident that we are heading into the strongest slice of the year for stocks. RECOMMENDED LINK [Why This A.I. System Could Be the Secret to Profiting from Tesla Stock](
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[Figuring out the best stocks to buy]( isnât complicated. It just involves high-probability, high-potential stocks that exhibit these three characteristics:
- Superior fundamentals that tell us the business itself is a powerhouse.
- Strong technicals that reveal strong buying pressure and indicate continued momentum.
- Big Money inflows — the really big money that moves stocks.
These are the cornerstones of Jasonâs [M.A.P. system]( that he uses in his [Quantum Edge services](. And heâs confident the stocks heâs sharing with his members — and other quality stocks — will be much higher by the end of the year. And thatâs why now is [the time to be buying]( [when other investors are willing to sell you good stocks at discounted prices](. Enjoy your Sunday, [Keith Kaplan]Keith Kaplan
CEO, TradeSmith Get Instant Access
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