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Weekly Economic and Stock Market Commentary: April 11, 2022


Weekly Economic and Stock Market Commentary: April 11, 2022

Note:  If you wish to send an IRA, SEP-IRA, 401K etc. contribution for 2021 do not delay, time is of the essence as both my office and the investment markets will be closed on Friday, April 15th in honor of Good Friday.

As for the stock market specifically:

The bears came out of hibernation last week to attack the technology sector. The Nasdaq Composite, which is comprised largely of what are classified as large company ‘growth’ stocks, fell multiple percentage points while the Dow Jones Industrial Average, substantially large company ‘value’ stocks, barely budged.

Readers may recall I wrote earlier this year that 2021 was a year where the market went up no matter the direction of my research. 2022 at least thus far has been quite the opposite.

Another aspect that presented itself this year is the rise in interest rates/decrease in bond prices. Last week we saw the phenomenon known as an inverted yield curve occur. In English, that is when shorter term interest rates are higher than longer terms interest rates. This is a reasonably accurate predictor of a recession. That said, there is little correlation to recessions and stock market movements in a particular direction.

As Walter Cronkite said for many years, “That’s the way it is.”

The bullish percent indicators had a difficult week, and are in danger of flipping (which is very likely by the time I hit “SEND” Tuesday morning). However, I am writing on Monday, so logic compels me to stick with WEALTH ACCUMULATION for at least the remainder of the day.

Remember, Xs mean OFFENSE or wealth accumulation, while Os mean DEFENSE, or wealth preservation.

Below is where our indicators stand as of April 8, 2022 (Courtesy Dorsey, Wright, and Associates).

On a general note:

In honor of the Easter shortened week, let’s keep it short and end here.

But, as always, contact me for help.