Earnings & Energy Rule the Roost - Your Money for August 11th, 2023
Posted by Steve Bokor
It was a tough week for technology companies as rising bond yields clipped the technology stocks. Well, that and the Moody’s downgrade of mid cap US banks. Ironically, investors ran back into US Treasuries one week after Fitch downgraded those bonds. Those Investors also received a bounce yesterday when the latest Consumer Price index pointed to moderating inflationary pressure. The top line and core rate both came in at 0.2% suggesting the Fed has gotten inflation under control. But people only had to look at their grocery and gas bill to realize last month’s numbers might be understated relative to current prices. If nothing else, today’s Producer Prices (inflation at the manufacturing level) shows continued inflation in the system that will likely show up in the coming month.
Turning to stocks, if we had to guess, we would say that the market is running out of steam as investors punish companies that fail to meet the targets set by Wall and Bay Street. On the other hand, OPEC continues to support oil prices and we think this will continue well into the future. It sets the stage for energy stocks to outperform. We also think industrial and material stocks will take the reins over the coming weeks but investor’s also need to know that September is not always kind to stock prices.
Investors therefore need to be cautious as earnings season continues next week with over 1000 North American companies reporting. Beyond that we think investors should enjoy the hot sunny weather and let us worry about stock prices.
Steve Bokor and the Ocean Wealth Team.
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