Connect with us

International

Q4 Stock Market Outlook: 3 Analysts, 3 Insights

Traders and investors don’t generally look forward to September. Besides being the end of summer vacations and back-to-school season, the stock market…

Published

on

Traders and investors don't generally look forward to September. Besides being the end of summer vacations and back-to-school season, the stock market usually hits its weakest point at this time of the year. But that doesn't necessarily mean you should stay away from the stock market in September.

If you patiently wait for the pullback to unravel, it could present investment opportunities for the last quarter of the year. And given that 2023 is a pre-election year, it's usually a strong one for equities. But which market segment should you invest in, and which ones should you stay away from? 

In a recent StockCharts TV episode of Charting Forward, recorded on September 12, 2023, Chief Market Strategist of StockCharts.com, David Keller, CMT, spoke with the following three technical analyst veterans:

  • Mish Schneider, Director of Trading Education at Market Gauge
  • Tom Bowley, Chief Market Strategist of EarningsBeats.com
  • Julius de Kempenaer, Creator of Relative Rotation GraphsⓇ and Senior Analyst at StockCharts.com 

In it, the group discussed how the broader market went through a pullback in August, but has since recovered. Given September is considered a weak month, does that mean the stock market could see another pullback before moving back up? Which areas of the market are likely to perform well, and which ones are likely to be the laggards in Q4? Let's find out.

"I'm not as bearish as I should be. The risk factors we look at say "risk-on" is the way to go." —Mish Schneider

So, assuming nothing out of the ordinary happens, Mish's outlook is positive. The stock market has remained strong despite rising interest rates, inflationary pressures, and rising oil prices. When the stock market is trending higher, there's no reason to fight that trend.

"We are in the summer doldrums and could see one more drop before going higher. But I'm also bullish." —Tom Bowley

Earlier in the year—mid-July—sentiment indicators showed bearish signs, and some negative divergences were emerging in the broader indexes. But that has reversed.

"If you look at a daily chart of the S&P 500 ($SPX), there is a series of higher highs and higher lows since the August pullback. I wouldn't be surprised if the S&P 500 exceeds 4600 in Q4." —Julius de Kempenaer

Well, you can't argue there. The way things are now (short of systematic risk hitting the market), the stock market seems to be hanging in there. It's almost as if it's waiting for a catalyst to push it higher. 

The pullback of the Magnificent Seven stocks was healthy and perhaps a much-needed one. Apple (ticker symbol: AAPL) hit a rough patch when China restricted the use of the iPhone. But if you look at a daily chart of AAPL (see below), it doesn't paint a doom-and-gloom picture.

CHART 1: DAILY CHART OF APPLE, INC. Although Apple's stock price faced some pressure, it still didn't take out its August low.Chart source: StockCharts.com. For educational purposes.

The stock hasn't taken out its August 18 low of $172 and could potentially reverse. If a hard-hit stock isn't looking bearish, is there any reason for investors to question the strength of the equity market?

What Could Go Wrong

For Mish, it would be the retail space. Consumer behavior is strongly correlated with the health of the US economy. And if consumers cut back on their spending, which is possible when inflationary pressures are ubiquitous and interest rates are high, it could add some stress to the broader market.

So far, there are no signs of a drop in retail sales. August retail sales were up 0.6% month over month—higher than the 0.1% increase expected by economists. A large part of that rise can be attributed to higher gasoline prices. If you strip away auto and fuel from the data, retail sales rose by a mere 0.2%. This could indicate that consumers may face pressure, so it's best to keep an eye on the retail sector by closely watching the SPDR S&P Retail ETF (XRT).

CHART 2: THE RETAIL SECTOR HELPS GAUGE CONSUMER SENTIMENT. The August high didn't come close to its February high. Does that mean retail spending could decline in the near future?Chart source: StockCharts.com. For educational purposes.

One interesting point Mish made was that the uptrend in XRT from June to July (2023) didn't come close to the February 2023 high. And even though XRT saw a jump due to the positive retail sales number, there's no sign of an uptrend—higher highs and higher lows.

Rising oil prices could put pressure on the equity market. While energy stocks are rising, Julius points out that other sectors, such as Consumer Discretionary, Technology, and Communication Services, are getting ready to gain strength. It's likely the Magnificent Seven will take the lead again, which is encouraging, given that the Energy sector is looking overbought.

Sector Relationships Are Important

Relationships between sectors often hold the key to future market action. Tom Bowley pays close attention to the relationships for warning signs. What you hear in the media may not appear on the charts. So, what are the charts indicating?

"In addition to Consumer Discretionary and Technology, Industrials and Financials tend to perform well during Q4," said Tom. So keep an eye on the chart of the Industrial Select Sector SPDR Fund (XLI) and the Financial Select Sector SPDR (XLF). The daily chart of XLF below shows the ETF bouncing off its 50-day simple moving average.

CHART 3: DAILY CHART OF THE FINANCIAL SELECT SECTOR SPDR (XLF). The Financial sector could perform well in Q4. The ETF appears to be bouncing off its 50-day simple moving average.Chart source: StockCharts.com. For educational purposes.

Another sector to watch is Materials. Besides production cuts, Mish feels that the rise in oil prices has to do with shortages. Because of this, we could see a boom in commodities. "Commodities have started to bottom and are picking up steam," added Julius.

Many say, "This time, it's different." And there's some truth to that. When considering buying a stock, there are many factors to analyze. For example, we're in a high-interest rate environment, which generally hurts growth stocks. But we haven't seen that.

"Interest rates are only one part of the equation," mentioned Tom. So, if growth is strong, you can expect growth stocks to continue rising.

The Bottom Line

So all three analysts had a similar opinion of the overall direction of the broader market. However, each had unique perspectives in their analysis. For additional insights on cryptocurrencies, sectors likely to outperform or underperform, and which stocks or charts to watch in Q4, check out the video (link at the bottom of this article). 

We're approaching the second half of September, which is typically the worst part of the month. But the broader indexes are showing bullish signs. Even hotter-than-expected inflation numbers didn't spark a selloff. There's still a Fed meeting later this month, but the chances of Fed Chairman Powell making any comments that may cause the market to sway significantly in either direction are slim. Will September's performance be different this year?


Read More

Continue Reading

International

Saudi Arabia Sentences Schoolgirl To 18 Years In Prison Over Tweets

Saudi Arabia Sentences Schoolgirl To 18 Years In Prison Over Tweets

Via Middle East Eye,

Saudi Arabia has sentenced a secondary schoolgirl…

Published

on

Saudi Arabia Sentences Schoolgirl To 18 Years In Prison Over Tweets

Via Middle East Eye,

Saudi Arabia has sentenced a secondary schoolgirl to 18 years in jail and a travel ban for posting tweets in support of political prisoners, according to a rights group.

On Friday, ALQST rights group, which documents human rights abuses in Saudi Arabia, revealed that the Saudi Specialised Criminal Court handed out the sentence in August to 18-year-old Manal al-Gafiri, who was only 17 at the time of her arrest.

Via Reuters

The Saudi judiciary, under the de facto rule of Crown Prince Mohammed bin Salman, has issued several extreme prison sentences over cyber activism and the use of social media for criticising the government.

They include the recent death penalty against Mohammed al-Ghamdi, a retired teacher, for comments made on Twitter and YouTube, and the 34-year sentence of Leeds University doctoral candidate Salma al-Shehab over tweets last year.

The crown prince confirmed Ghamdi's sentence during a wide-ranging interview with Fox News on Wednesday. He blamed it on "bad laws" that he cannot change

"We are not happy with that. We are ashamed of that. But [under] the jury system, you have to follow the laws, and I cannot tell a judge [to] do that and ignore the law, because... that's against the rule of law," he said.

Saudi human rights defenders and lawyers, however, disputed Mohammed bin Salman's allegations and said the crackdown on social media users is correlated with his ascent to power and the introduction of new judicial bodies that have since overseen a crackdown on his critics. 

"He is able, with one word or the stroke of a pen, in seconds, to change the laws if he wants," Taha al-Hajji, a Saudi lawyer and legal consultant with the European Saudi Organisation for Human Rights, told Middle East Eye this week.

According to Joey Shea, Saudi Arabia researcher at Human Rights Watch, Ghamdi was sentenced under a counterterrorism law passed in 2017, shortly after Mohammed bin Salman became crown prince. The law has been criticised for its broad definition of terrorism.

Similarly, two new bodies - the Presidency of State Security and the Public Prosecution Office - were established by royal decrees in the same year.

Rights groups have said that the 2017 overhaul of the kingdom's security apparatus has significantly enabled the repression of Saudi opposition voices, including those of women rights defenders and opposition activists. 

"These violations are new under MBS, and it's ridiculous that he is blaming this on the prosecution when he and senior Saudi authorities wield so much power over the prosecution services and the political apparatus more broadly," Shea said, using a common term for the prince.

Tyler Durden Sun, 09/24/2023 - 11:30

Read More

Continue Reading

International

Biden To Join UAW Picket Line As Strike Expands, Good Luck Getting Repairs

Biden To Join UAW Picket Line As Strike Expands, Good Luck Getting Repairs

Authored by Mike Shedlock via MishTalk.com,

In a symbolic, photo-op…

Published

on

Biden To Join UAW Picket Line As Strike Expands, Good Luck Getting Repairs

Authored by Mike Shedlock via MishTalk.com,

In a symbolic, photo-op gesture to win union votes, Biden will head to Michigan for a token visit.

Biden to Walk the Picket Line

Taking Sides

CNN had some Interesting comments on Biden Talking Sides.

Jeremi Suri, a presidential historian and professor at University of Texas at Austin, said he doesn’t believe any president has ever visited a picket line during a strike.

Presidents, including Biden, have previously declined to wade into union disputes to avoid the perception of taking sides on issues where the negotiating parties are often engaged in litigation.

On September 15, the day the strike started, Biden said that the automakers “should go further to ensure record corporate profits mean record contracts for the UAW.”

Some Democratic politicians have been urging Biden to do more. California Rep. Ro Khanna on Monday told CNN’s Vanessa Yurkevich that Biden and other Democrats should join him on the picket line.

“I’d love to see the president out here,” he said, arguing the Democratic Party needs to demonstrate it’s “the party of the working class.”

UAW Announces New Strike Locations

As the strike enters a second week, UAW Announces New Strike Locations

UAW President Shawn Fain called for union members to strike at noon ET Friday at 38 General Motors and Stellantis facilities across 20 states. He said the strike call covers all of GM and Stellantis’ parts distribution facilities.

The strike call notably excludes Ford, the third member of Detroit’s Big Three, suggesting the UAW is more satisfied with the progress it has made on a new contract with that company.

General Motors plants being told to strike are in Pontiac, Belleville, Ypsilanti, Burton, Swartz Creek and Lansing, Michigan; West Chester, Ohio; Aurora, Colorado; Hudson, Wisconsin; Bolingbrook, Illinois; Reno, Nevada; Rancho Cucamonga, California; Roanoke, Texas; Martinsburg, West Virginia; Brandon, Mississippi; Charlotte, North Carolina; Memphis, Tennessee; and Lang Horne, Pennsylvania.

The Stellantis facilities going on strike are in Marysville, Center Line, Warren, Auburn Hills, Romulus and Streetsboro, Michigan; Milwaukee, Wisconsin; Plymouth, Minnesota; Commerce City, Colorado; Naperville, Illinois; Ontario, California; Beaverton, Oregon; Morrow, Georgia; Winchester, Virginia; Carrollton, Texas; Tappan, New York; and Mansfield, Massachusetts.

Contract Negotiations Are Not Close

Good Luck Getting Repairs

Party of the Working Cass, Really?

Let’s discuss the nonsensical notion that Democrats are the party of the “working class”.

Unnecessary stimulus, reckless expansion of social services, student debt cancellation, eviction moratoriums, earned income credits, immigration policy, and forcing higher prices for all, to benefit the few, are geared towards the “unworking class”.

On top of it, Biden wants to take away your gas stove, end charter schools to protect incompetent union teachers, and force you into an EV that you do not want and for which infrastructure is not in place.

All of this increases inflation across the board as do sanctions and clean energy madness.

Exploring the Working Class Idea

If you don’t work and have no income, Biden may make your healthcare cheaper. If you do work, he seeks to take your healthcare options away.

If you want to pay higher prices for cars, give up your gas stove, be forced into an EV, subsidize wind energy then pay more for electricity on top of it, you have a clear choice. If you support those efforts, by all means, please join him on the picket line for a token photo-op (not that you will be able to get within miles for the staged charade).

But if you can think at all, you understand Biden does not support the working class, he supports the unworking class.

Tyler Durden Sun, 09/24/2023 - 10:30

Read More

Continue Reading

International

UK Quietly Passes “Online Safety Bill” Into Law

UK Quietly Passes "Online Safety Bill" Into Law

Authored by Kit Knightly via Off-Guardian.org,

Buried behind the Brand-related headlines…

Published

on

UK Quietly Passes "Online Safety Bill" Into Law

Authored by Kit Knightly via Off-Guardian.org,

Buried behind the Brand-related headlines yesterday, the British House of Lords voted to pass the controversial “Online Safety Bill” into law. All that’s needed now is Royal assent, which Charles will obviously provide.

The bill’s (very catchy) long-form title is…

A Bill to make provision for and in connection with the regulation by OFCOM of certain internet services; for and in connection with communications offences; and for connected purposes.

…and that’s essentially it, it hands the duty of “regulating” certain online content to the UK’s Office of Communications (OfCom).

Ofcom Chief Executive Dame Melanie Dawes could barely contain her excitement in a statement to the press:

“Today is a major milestone in the mission to create a safer life online for children and adults in the UK. Everyone at Ofcom feels privileged to be entrusted with this important role, and we’re ready to start implementing these new laws.”

As always with these things, the bill’s text is a challenging and rather dull read, deliberately obscure in its language and difficult to navigate.

Of some note is the “information offenses” clause, which empowers OfCom to demand “information” from users, companies and employees, and makes it a crime to withhold it. The nature of this “information” is never specified, nor does it appear to be qualified. Meaning it could be anything, and will most likely be used to get private account information about users from social media platforms.

In one of the more worrying clauses, the Bill outlines what they call “communications offenses”. Section 10 details crimes of transmitting “Harmful, false and threatening communications”.

It should be noted that sending threats is already illegal in the UK, so the only new ground covered here is “harmful” and/or “false” information, and the fact they feel the need to differentiate between those two things should worry you.

After all, the truth can definitely be “harmful”…Especially to a power-hungry elite barely controlling an angry populace through dishonest propaganda.

Rather amusingly, the bill makes it a crime to “send a message” containing false information in clause 156…then immediately grants immunity to every newspaper, television channel and streaming service in clause 157.

Apparently it’s OK for the mainstream media to be harmful and dishonest.

But the primary purpose of the new law is a transfer of responsibility to enable and incentivize censorship.

Search engines (“regulated search services”, to quote the bill) and social media companies (“regulated user-to-user services”) will now be held accountable for how people use their platform.

For example: If I were to google “Is it safe to drink bleach?”, find some website that says yes, and then drink bleach, OfCom would not hold me responsible. They would hold Google responsible for letting me read that website. Likewise, if someone tweets @ me telling me to drink bleach, and I do so, Twitter would be held responsible for permitting that communication to take place.

This could result in hefty fines, or even potentially criminal charges, to companies and/or executives of those companies. It could even open them up to massively expensive civil suits (don’t be surprised if such a legal drama hits the headlines soon).

Unsurprisingly the mainstream coverage of the new laws barely mentions any of these concerns, instead opting to put child pornography front and centre. Because the Mrs Lovejoy argument always works.

That’s all window dressing, of course, what this is really about is “misinformation” and “hate speech”. Which is to say, fact-checking mainstream lies and calling out mainstream liars.

Section 7(135) is entirely dedicated to the creation of a new “Advisory committee on disinformation and misinformation”, which will be expected to submit regular reports to OfCom and the Secretary of State on how best to “counter misinformation on regulated services“.

This is clearly a response to Covid, or rather the failure of Covid.

Essentially, the pandemic narrative broke because the current mechanisms of censorship didn’t work well enough. In response, the government has just legalised and out-sourced their silencing of dissent.

See, the government isn’t going to actually censor anyone themselves, protecting it from pro-free speech criticism. Rather, huge financial pressure will be applied on tech giants to be “responsible” and “protect the vulnerable”. Meaning de-platforming and cancelling independent media via increasingly opaque “terms of service violations”

These companies will be cheered on by the vast crowd of jabbed-and-masked NPCs who have been so successfully brainwashed into believing the “they are a private company and can do that they want” argument.

This has been going on for years already, of course, but that was covert stuff. Now it’s legal in the UK, and is about to get a lot worse.

It won’t be just the UK either, considering the messaging on “misinformation” being seen at the UN in the last few days, we should expect something similar on a global scale.

You can read the full text of the Online Safety Bill here.

Tyler Durden Sun, 09/24/2023 - 08:10

Read More

Continue Reading

Trending