The S&P 500 (SPY) managed to break through the 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 things around after "the worst week" so far in 2023? Read on to find out.
(Please enjoy this updated version of my weekly commentary originally published March 3rd, 2023 in the POWR Stocks Under $10 newsletter).
he past two days have seen a few positive catalysts that kicked things into a positive direction and pushed shares back above 4,000 (although we still have a ways to go before we retest the important 4,100 level).
First, the 10-year Treasury yield fell below 4% which was a positive sign.
Traders also paid attention to February's PMI data. PMI rose to 50.6, surpassing analysts' consensus of 50.5. The ISM Non-Manufacturing PMI fell from 55.2 to 55.1 but managed to surpass expectations.
Andrew Hunter, the Deputy Chief U.S. Economist, said that these figures suggest that the economy is growing but not as fast as some people think. Capital Economics' Economist, Andrew Hunter, says that while the economy is expanding, it is not growing as fast as people think.
Most market segments, including Real Estate and Consumer Cyclical stocks, enjoyed a positive day. Consumer Defensive stocks saw little upward movement.
This means traders are still willing to take on more volatile assets. This is great news for stocks below $10.
We'll have a positive week if the S&P 500 SPY stays the same, which would be a huge win after last week which was one the worst this year.
This week's headlines were also made by the Federal Reserve, which released its semiannual Monetary policy report to Congress. This report details the Fed's plans to keep increasing interest rates in order to bring inflation back down to 2%.
Raphael Bostic, President of Atlanta Federal Reserve, wrote an essay urging the central bank to increase its policy rate 50 basis points to a range between 5% and5.25%, then to keep it there until 2024.
He said that he is keeping an eye on data and will adjust the policy trajectory if necessary.
The Fed increased the benchmark rate by a quarter of a percentage point in February, and will release new projections after the March 21-22 meeting.
Just like we saw last year, the market will likely make some big moves based on what the Fed officials say between now and then.
While this week saw some wins for the bulls, a lot more will have to happen for the S&P 500 to overtake the important 4,100 level again.
But our portfolio performed well last year despite the volatility, and I expect we'll see the same this year, especially considering we have some positive catalysts coming for a handful of our holdings.
What gives these stocks the right stuff to become big winners, even in this brutal stock market?
First, because they are all low priced companies with the most upside potential in today's volatile markets.
But even more important, is that they are all top Buy rated stocks according to our coveted POWR Ratings system and they excel in key areas of growth, sentiment and momentum.
Click below now to see these 3 exciting stocks which could double or more in the year ahead.
SPY shares . Year-to-date, SPY has gained 5.69%, versus a % rise in the benchmark S&P 500 index during the same period.
About the Author: Meredith Margrave
POWR Growth and POWR Stocks Under $10