November 27, 2023

 

(THE MARKETS AHEAD AND A COUPLE OF STOCKS FOR YOUR CHRISTMAS STOCKING)

November 27, 2023

 

Hello everyone,

Welcome to the last week of November.  In the Northern hemisphere, you are heading into winter and in the southern hemisphere, we are heading into a hot summer.  Bushfires have already been experienced in four states, including New South Wales, Western Australia, Queensland, and Victoria.  And on top of the cost-of-living crisis in Australia, we are now going through our eighth Covid wave, with many deaths being recorded.

 

Economic Calendar

Markets will have one hurdle to clear in the week ahead.  On Thursday, investors will get the October personal consumption expenditures reading, which is the Federal Reserve’s preferred inflation gauge.  It’s set to show a rise of 0.2%, down from the 0.7% rise in the prior month, according to FactSet consensus estimates.

In a nutshell, if the number is hotter than expected, it could call into question whether the Fed is done tightening.  So, in other words, it could be negative for the markets if the number comes in worse than expected.

Several retailers are also set to report.  Here’s a summary.

 

Monday, Nov 27

8 a.m. Building Permits final (October)

10 a.m. New Home Sales (October)

10:30 a.m. Dallas Fed Index (November)

 

Tuesday, Nov 28

9 a.m. FHFA Home Price Index (September)

9 a.m. S&P/Case Shiller comp. 20 HPI (September)

10 a.m. Consumer Confidence (November)

10 a.m. Richmond Fed Index (November)

Earnings:  Hewlett Packard Enterprise, NetApp, Intuit

 

Wednesday, Nov 29

8:30 a.m. GDP Chain Price second preliminary (Q3)

8:30 a.m. GDP Second preliminary (Q3)

Earnings:  Costco Wholesale, Synopsys, Dollar Tree, Hormel Foods

 

Thursday, Nov 30

8:30 a.m. Continuing Jobless Claims (11/18)

8:30 a.m. Initial Claims (11/25)

8:30 a.m. PCE Deflator (October)

8:30 a.m. Personal Consumption Expenditure (October)

8:30 a.m. Personal Income (October)

9:45 a.m. Chicago PMI (November)

10 a.m. Pending Home Sales Index (October)

Earnings:  Ulta Beauty, Salesforce, Kroger

 

Friday, Dec. 1

9:45 a.m. Markit PMI Manufacturing final (November)

10 a.m. Construction Spending (October)

10 a.m. ISM Manufacturing (November)

Earnings:  Dominion Energy, Cboe Global Markets, Cardinal Health, Gartner

 

Market Update:

Wall Street looks set to wrap up a strong month this week as stocks head for new highs heading into the year-end.  The major averages have rallied after cooler inflation reports appeared to confirm the Federal Reserve is done hiking, raising hopes it can start cutting next year.  The Nasdaq Composite is on pace to close out the month with a double-digit advance, up 10%.

Historically, the market has done well in the final quarter of a pre-election year, and even better for a first-term president seeking re-election, according to CFRA’s Stovall.  Since World War II, the market has risen 6% on a total return basis and has never dropped.

Some analysts consider the market overbought now, and they are expecting the market to start to slow going into this week.  We will have to wait and see who has called this market correctly. 

I still see the S&P 500 rallying up towards 4,700 to 4,800 and I am looking for a double top in the Nasdaq before the market starts to pull back.

Gold is displaying a developing inverse Head and Shoulders continuation pattern.  A sustained break above neckline resistance at $2,017 completes this bullish structure, yielding an upside target of $2,210 over the coming weeks.

The uptrend is still in progress in Bitcoin with a target of around $43,000.

 

What should you have in your portfolio for the long term?

Wall Street loves many of Warren Buffett’s stock picks.

These are two I would recommend.

Amazon (AMZN)

84% of Wall Street analysts rate this stock as a buy.  Analysts argue that there is still a 22% upside from current prices.  The company recently solidified a deal with Snap that allows users of the platform to purchase Amazon products without leaving the Snapchat application.

Snowflake (SNOW)

56% of Wall Street analysts rate SNOW as a buy with price targets giving the stock upside of 19% from current levels.  The company is still in the early innings of growth.

 

 

 

 

 

 

Cheers,

Jacquie