Market at a Glance - 10/26/2023
By: Christopher Mistal
October 26, 2023
Please take a moment and register for our member’s only webinar, November 2023 Outlook and Update on Wednesday November 1, 2023, at 2:00 PM EDT here:
Please join us for an Almanac Investor Member’s Only discussion of recent market action with time for Q & A at the end. Jeff and Chris will cover their outlook for November, review the Tactical Seasonal Switching Strategy ETF, Sector Rotation ETF, and Stock Portfolio holdings and trades. We will also share our assessments of the Fed, inflation, the "Best Months" as well as relevant updates to seasonals now in play.
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Market at a Glance
10/26/2023: Dow 32784.30 | S&P 4137.23 | NASDAQ 12595.61 | Russell 2K 1657.00 | NYSE 14858.70 | Value Line Arith 8409.66
Seasonal: Bullish. November is the best month for S&P 500, Russell 1000 and 2000 and second best for DJIA and NASDAQ. November kicks off the “Best Six/Eight Months.” Pre-election year November performance has been softer, but average performance remains positive.
Fundamental: Mixed. Q3 GDP advance estimate was an impressive 4.9%, lead by strength in consumer spending, but personal savings retreated substantially suggesting the consumer could be strained to maintain their spending. Corporate earnings have also been mixed with high profile beats and nearly as big misses. Inflation has cooled but continues to run warmer than desired. Geopolitical tensions and uncertainty that were already elevated before Hamas attacked Israel are now about maxed out. Auto workers are still on strike and yet another federal government shutdown looms. 
Technical: Correction. Seasonal forces, geopolitical tensions, and interest rates have extended the market’s correction. DJIA, S&P 500 and NASDAQ have all slipped below their respective 200-day moving averages in search of support. Next levels of potential support are DJIA 32000, S&P 500 4100 and NASDAQ 12200. Technical indicators are at or near oversold levels.
Monetary: 5.25 – 5.50%. The Fed’s delicate balancing act of crafting a soft economic landing while fighting inflation continues. Uncertainty seems to only have grown as some data suggests that rates are sufficiently tight while other data points to even higher rates for longer. Persistent government spending is only making the Fed’s job harder.
Sentiment: Retreating. According to Investor’s Intelligence Advisors Sentiment survey Bullish advisors stand at 50.0%. Correction advisors are at 25.7% while Bearish advisors numbered 24.3% as of their October 25 release. Prior to this release bullish sentiment had risen for three weeks reaching a peak of 51.4% before the recent bout of weakness. Sentiment is essentially neutral now.