December 15, 2022

Thursday

December 15, 2022

Hello everyone,

The interest rate rise was expected – 0.5%.

But it wasn’t that that spooked the market.

Powell made it very clear that many more rate hikes may be needed before inflation is under control. This language was like putting a cat among the pigeons. I think everybody is expecting rates to turn down next year. What if that is not the case and Powell keeps raising? Not quite sure if the market has priced this in.

The market could see a slight Santa rally at the end of the month, going into the beginning of January.

Then we could see a retest of the lows sometime in the first half. It’s going to be a choppy market.

Tech is still weak, so that’s going to weigh on the market. Healthcare is holding up – this sector typically outperforms when inflation is high and falling.

If you had to pick one tech stock for your Christmas stocking – the consensus is to pick Apple. Morgan Stanley expects Apple’s services business to return to double-digit year-on-year growth, after having missed analyst estimates for the fourth quarter that ended in September. Morgan Stanley believes Apple has room to grow in its core business. It says that the company isn’t wholly dependent on the next iPhone category for growth, which it can also achieve with existing products and by increasing its penetration in emerging markets such as India, Brazil, Indonesia, Mexico, and Vietnam.

Happy Friday and have a wonderful weekend.

Cheers,

Jacque

" Imperfection is beauty, madness is genius and it’s better to be absolutely ridiculous than absolutely boring. " - Marilyn Monroe

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