Read about financial developments and other topical relevant information to you.

Weekly Economic and Stock Market Commentary – December 5, 2022

Weekly Economic and Stock Market Commentary – December 5, 2022

As for the stock market specifically: It was another week of gains for stocks, with the Federal Reserve jumping into the action by stating they may reduce the speed at which they are raising short-term interest rates. The market saw fit to make a large move, including a day where the NASDAQ Composite rose more than 4%. It also was amusing to hear the Federal Reserve changed its collective mind on the day the market declined.

The movement over the past few weeks has brought us close to a “normal” year where the market moves approximately 12% in from the starting point. That said, we are close to it, and have four weeks to go with all the fun that can occur.

A noteworthy action did occur last week as we saw the relative strength of stocks vs. cash move back to favoring stocks.

The bullish percent indicators had modest gains last week. We still enjoy good field position. The nature of the evidence favors WEALTH ACCUMULATION mode.

Remember, X’s mean OFFENSE or wealth accumulation, while O’s mean DEFENSE, or wealth preservation.   

Below is where our indicators stand as of December 2, 2022 (Courtesy Dorsey, Wright, and Associates).

On a general note:  The Department of Labor announced the US economy put 263,000 new employees on the payroll in November. This was well over the 200,000 new jobs anticipated by economists. The unemployment rate remained at 3.7%. Average hourly earnings rose 5.1% compared to November 2021. The labor participation rate fell again, but no number was in the report I have.

The Commerce Department revised the 3rd quarter Gross Domestic Product upwards to show an annualized growth rate of 2.9% from the original 2.6%. The revisions came largely from increases in consumer spending, and business investment.

The final piece of news concerns real estate prices. The September S & P CoreLogic Case-Schiller fell 1% in September compared to August 2022 on a nationwide basis. That said, September 2022 prices were 10.6% higher than September 2021. The 10-city index rose 9.7%, while the 20-city index was up 10.4%. Both numbers are comparisons between September 2022 and September 2021.

If you want more information or have any questions, please contact me.