Here are the market observations for today –
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Daily Dose
US economy is in recession
The nightmare is not ending. 2022 is turning out to be a disastrous year for equities. The Atlanta Fed’s GDP tracker now puts the second-quarter growth at a negative 2.1% which means the US economy is technically in recession. The companies will announce earnings this month and it needs to be seen how consumer spending slowdown and inflation is going to impact earnings. There is no conviction among buyers. The Sellers have run out of energy. As we head into the long weekend, here are some stocks and sectors that deserve your attention. [Read more…] about US economy is in recession
Has US market entered a new phase: Neutral but Bearish
US stock market stunned everyone with a big bullish move last week but it has destroyed all the bullish enthusiasm with a big down day yesterday. There is fear once again and today the market struggled for direction. The big question the market has to debate: is how dramatically the US economy has slowed down due to lower consumer spending. The US indices closed flat for the day with Apple, Microsoft, Amazon, and Facebook all up around 1.4%. These are the stocks that can now keep the sentiment neutral for the market.
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Will the US market stop falling?
When everybody sits on the same side of the boat, the boat overturns. June is about to end and this will be the worst first half for stock in decades. The US stock market got extremely oversold and so the market had to do something to shake everybody out of complacency and lazy thinking. It did bounce with intensity and now what it needs to do – is make some follow-through move. It will be such a relief if the market just stops falling. It will create a playground for strong stocks to start performing in a meaningful way.
Bearish Road to nowhere
The market is so oversold that it cannot fall but fundamentals are so bad that it cannot rally. This is the current state of the US market
The Oversold Bounce
This is the worst market environment since 1940. Nothing seems to be working if you are an investor and the stop loss has been the only saving tool for traders. Nobody knows what lies ahead as everyone seems scared. No matter how great the business is, the stocks are getting sold off and there is nothing much one can do about it. Recession fears are damaging even good-quality stocks. Value stocks were rallying earlier this year but see how even Berkshire Hathaway stock has come down.
Now nothing goes down in a straight line, and the markets do bounce from time to time. Yesterday was one such day and here are a few things that deserve your attention.
Anticipating Relief on Inflation front
There comes a time when the market stops falling and despite all negative newsflow, the stocks try to find the energy to move higher. This has been the story of the US market for the last two weeks. There is always a reason. China lifting covid restrictions and anticipation of lower inflation is making bears nervous and bulls hopeful about the future. The consumer price index for May is scheduled to be announced on Friday (the consensus estimate is an 8.2% increase). Here are a few stocks I am keeping a close eye on
Super Bearish sentiment = Bullish Environment for stocks.
The market always surprises when you are least prepared for it. In a bad market environment, nothing works, and then suddenly the market changes, and everything starts working again. The US stock market has once again started rewarding long trades and here are a few interesting charts and opportunities to keep an eye on.
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Xtreme Volatility in a Bearish Boat
The market is making intense moves every day. One day it will rally like crazy and then it will fall vertically. Everybody is worried about recessionary fears. There is real concern that aggressive Fed policies would damage economic growth but would not bring down inflation that’s caused by broken supply chains, Russia Ukraine war, and China’s zero covid policies. The only bullish argument one can make right now is how bearish everyone is but that’s not helping anyone for now.
Why Apple is the stock to watch right now
The stock market is screaming Recession and it looks like the companies have started responding. The number of Americans filing for first-time jobless claims rose to the highest level since early this year, a possible sign that companies might be going slow now. One data does not form a trend but it does indicate the obvious. Yesterday’s selling has shaken everyone. This is the second time the market has sold off violently after making a strong bullish move the previous day. Remember, When the US Fed made the policy announcement, the market rallied vertically with the sell-off on the following day; and then it happened again on Monday and Tuesday this week. Such price action breaks the conviction of dip buyers.
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