Sorting Through the Noise of Economic and Market Data

58% of economists still say there’s more than a 50% chance of downturn in the next 12 months. But jobs and spending show that the economy is hot: The housing market is under pressure as interest rates are climbing, but new home sales are at their highest level in 10 months, and layoffs are rising among industry leaders. But The unemployment rate fell to 3.4% which is the lowest jobless level since May 1969. The Fed Chairman Jerome Powell says disinflation “has begun.” But the CPI increased again. The economy appears to confuse investors.

Despite inversed treasury yield that has preceded seven of the past eight recessions, As well as top wall street strategists’ pessimistic forecasts. The market seemingly found a solid support at the 200MA on March 2 while a following rebound retook 50MA that made the uptrend that started from last October still valid. As all technical indicators we mentioned in our last newsletter have not been changed, the current market remains bullish.

Our long-term investment portfolio experienced a decline of -2.9% in February due to a market pullback, but overall, it has returned 41.03% since May 2020. (click for our latest portfolio performance report). Our dynamic investment portfolio has returned 7.17% since May 2020, but it experienced a drop of -1.42% in February. Our closed structured investments generated a 17% average return so far. Given the potential for increased market volatility due to rising inflation, higher interest rates, and longer investment horizons, investors should remain cautious. Our most recent income structured investment, which tracks AAPL, AMZN, and TSLA, offers a return of 15.12%, monthly distributions, and 50% protection. This investment can help investors navigate these challenging market conditions.

Along with the key bullish technical signals I listed in our previous newsletter(https://mailchi.mp/7f6f68d3d957/the-bull-market-conundrum-to-hike-or-not-to-hike),  massive liquidity from central banks is another main driver that boosted the equity market. In which the People’s Bank of China injected $450B in in December 2022 and January 2023. The China equity market could be stabilized in the near term as well as its real estate market. For investor who has more exposure in China investments, it might be the time to think reallocation.

Next week, investors will be closely watching Powell’s testimony, the job report, inflation data, and the Fed’s decision. These events will be the key catalysts in determining whether this year’s stock-market revival gets derailed or starts rolling again after a February slump.