The S&P 500 (SPY) managed to break above the all-important 4,000 level, which is great news for stock traders. Looks like we might be able to climb that wall of worry after all! How did we manage to turn the tide after “the worst week” so far in 2023? Keep reading to find out.
(Please enjoy this updated version of my weekly commentary originally published March 3, 2023 in the POWR Bulletin Stocks Under $10).
he last couple of days have seen some positive catalysts that have pushed things in a positive direction and pulled stocks back above 4000 (although we still have some way to go before retesting the important 4100 level).
First, the 10-year Treasury yield also fell below 4%, which was a positive sign for the market.
The February PMI data also caught the attention of traders. The PMI improved to 50.6, beating the analyst consensus of 50.5. The ISM non-manufacturing PMI fell from 55.2 to 55.1, but still managed to beat expectations.
According to Andrew Hunter, deputy chief U.S. economist at Capital Economics, the numbers suggest the economy is growing, but not as fast as some thought.
Most market segments, especially consumer cyclical and real estate stocks, had a good day, with the exception of consumer defensive stocks, which didn’t see much upside movement .
This indicates that traders are still in “risk on” mode, meaning they are ready to invest in more volatile assets at this time. That’s great for our sub-$10 stocks.
If the S&P 500 (TO SPY) stays where it is, we’ll have a positive week, which is a big win after last week, which was one of the worst so far this year.
The Federal Reserve also made headlines this week, releasing its semi-annual report on monetary policy to Congress. The report outlines the Fed’s plan to continue raising interest rates to bring inflation down to 2%.
Atlanta Federal Reserve Chairman Raphael Bostic wrote an essay calling on the central bank to raise its key rate by 50 basis points to a range of 5% to 5.25% and then hold it until 2024.
He also said he was keeping tabs on the data and would adjust his policy trajectory if necessary.
The Fed raised the benchmark rate by a quarter of a percentage point in February and will release new projections after the March 21-22 meeting.
Just as we saw last year, the market is likely to make big moves based on what Fed officials say by then.
While this week has seen some wins for the bulls, it will take much longer for the S&P 500 to break above the all-important 4,100 level again.
But our portfolio performed well last year despite the volatility, and I expect to see the same this year, especially as we have positive catalysts ahead for a handful of our holdings.
What to do next?
If you want to see more stocks under $10, you should check out our free special report:
What gives these stocks what it takes to become big winners, even in this brutal stock market?
First, because they are all low-priced companies that have the greatest upside potential in today’s volatile markets.
But what is even more important is that they are all the highest rated stocks to buy according to our coveted POWR rating system and excel in the key areas of growth, sentiment and momentum.
Click below now to see these 3 exciting stocks that could double or more in the coming year.
All my wishes!
Chief Growth Strategist, StockNews
Editor, POWR Stocks Under $10 Newsletter
SPY Actions. Year-to-date, SPY has gained 5.69%, versus a % rise in the benchmark S&P 500 over the same period.
About the Author: Meredith Margrave
Meredith Margrave has been a renowned financial expert and market commentator for two decades. She is currently editor-in-chief of POWR Growth And POWR Stocks Under $10 newsletters. Learn more about Meredith’s journey, as well as links to her most recent articles.