{"id":59013,"date":"2023-10-07T13:38:35","date_gmt":"2023-10-07T17:38:35","guid":{"rendered":"https:\/\/www.ino.com\/blog\/?p=59013"},"modified":"2023-10-17T13:42:47","modified_gmt":"2023-10-17T17:42:47","slug":"investor-alert-hidden-gem-for-stocks-found-in-friday-report","status":"publish","type":"post","link":"https:\/\/wwwtest.ino.com\/blog\/2023\/10\/investor-alert-hidden-gem-for-stocks-found-in-friday-report\/","title":{"rendered":"Investor Alert: Hidden Gem for Stocks Found in Friday Report"},"content":{"rendered":"

Please enjoy this updated version of weekly commentary from the\u00a0Reitmeister Total Return<\/a>\u00a0newsletter. Steve Reitmeister is the CEO of\u00a0StockNews.com<\/a>\u00a0and Editor of the\u00a0Reitmeister Total Return<\/a>.Click Here to learn more about Reitmeister Total Return<\/a><\/p>\n

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SPY<\/a><\/strong>\u00a0\u2013 Stocks have been pressing lower of late as the bond rates continue to rise. This had the S&P 500 (SPY) dangerously close to the 200 day moving average. Yet hidden in the Friday Government Employment report was a clue that sparked a rally and maybe puts an end to recent market weakness. Read on below for full details\u2026.<\/em><\/p>\n<\/div>\n<\/div>\n

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Right now the most important thing on investor\u2019s minds is the dramatic rise in bond rates, and how that makes stocks less attractive. I tackled that subject pretty thoroughly in my previous commentary this week. Be sure it read now if you haven\u2019t already:<\/p>\n

When is the Stock Bouncing Coming?<\/a><\/p>\n

The quick answer to the above question, is that the bounce could be forming now as stock flirt with the 200 day moving average at 4,206 for the S&P 500 (SPY<\/a>). That is the red line in the chart below.<\/p>\n

\"\"<\/p>\n

On the fundamental front, if rates keep ripping higher, then it will only put more pressure on stock prices. I sense that 5% is a logical top for 10 year rates\u2026but who says that the market is logical?<\/em><\/p>\n

Also note on the fundamental end of things that the economic reports continue to come in positive. Even 20 months into the most aggressive Fed rate hiking regime in history, GDP estimates continue to be robust.<\/p>\n

GDP Now has it their Q3 estimate all the way up to +4.9% bolstered by the most recent ISM Manufacturing report. Further, the Blue Chip Economist panel sees +2.9% as the more logical growth trajectory.<\/p>\n

If I were to place a bet in Vegas I would say the Economists are much closer to the final number. Regardless, it is hard to look at these results and see a recession coming\u2026and therefore it is hard to be truly bearish.<\/p>\n

On top of that the Government Employment Situation report came out Friday morning much hotter than expected. Since so much of the initial market reaction is based on just reading the headline\u2026then yes stocks sold off early in the session.<\/p>\n

Gladly, as prudent investors dug into the details they discovered a hidden gem in the report. That being month over month wage inflation down to only 0.2% which means we are ebbing ever closer to the 2% inflation target for the Fed as this \u201csticky\u201d form of inflation becomes unstuck at such high levels.<\/p>\n

As this new spread\u2026so too did the stock gains. As I put this commentary to rest with 90 minutes left in the Friday session we have a +1.4% result for the S&P 500 and nicely above recently resistance at 4,300.<\/p>\n

Back to the big picture conversation about higher rates\u2026.<\/p>\n

Yes, stock prices are down of late as \u201crates normalize\u201d to more traditional historic levels. Meaning we are no longer enjoying the artificially low rates we that have been in hand the past 15 years.<\/p>\n

Once everyone makes this adjustment to the new world view of rates\u2026and realize the world is not falling apart\u2026they will be compelled to put their money into the best stocks. And maybe Friday\u2019s rally is an early sign of that taking place.<\/p>\n

So, which are those best stocks, you ask?<\/em><\/p>\n

Read on below for the answer\u2026<\/p>\n

What To Do Next?<\/em><\/strong><\/p>\n

Discover my brand new \u201c2024 Stock Market Outlook\u201d covering:<\/p>\n