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Weekly Economic and Stock Market Commentary – September 25, 2023

As for the stock market specifically:

The ill winds of September came calling for investors last week.

The major market averages all lost multiple percentage points last week. The Nasdaq took the hardest decline. What seems strange in this year where few stocks are carrying the load, is the overall lack of performance in the Dow Jones Industrial Average, which is very close to even for the year.

Something surprising about this past week was the market reaction to the Federal Reserve’s decision to keep interest rates steady. Markets declined on the topic of money not being more expensive tomorrow than today. Another explanation for the market response is that this is September, and September is generally a difficult month.

Let me give you something that has some concrete information behind it. You also may find this to be a ray of hope compared to what happened over the past 3 weeks.

Let’s go to my customary metaphor of the market being a spring. The markets closed last week in an oversold condition. Think of that as a spring with a 1000-pound load sitting on top it.

In English, the spring is compressed. The spring does not have so much of a load on it that it is ready to break (the springs I use in these columns never fail from the load), so markets can continue down (more load).

As you may have expected, the bullish percent indicators fell again last week. The OTC Bullish Percent Indicator fell into the green zone (let’s hope when it goes back on offense it plays better than the offenses of the two professional football teams from NY). I reiterate the recommendation of WEALTH PRESERVATION strategies for client money.

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

Below is where our indicators stand as of September 22, 2023 (Courtesy Dorsey, Wright, and Associates).

On a general note:

The National Association of Realtors provided news on existing home sales during August. The trade group announced a seasonally adjusted annualized rate of 4.04 million units, which represents a decline of 0.7% from July, and 15.3% from August 2022. The article did not mention anything concerning current prices.

If you want more information about a particular stock or mutual fund, please contact me and I will get it to you.