PUT IN WORK (12/11/2023)

We’ve had another rather spectacular week in the market, with indices climbing higher and showing the potential to break through the July level. The S&P 500 (SPY) inched up 0.2%, while the Nasdaq (QQQ) found a bit more traction, ending up a solid 0.6%.

Most investors are coasting here at the end of the year, but there’s still one event before the year’s end that investors and analysts alike are watching: the Fed meeting. The meeting will occur on December 12th and 13th, and the assumption and hope is that rates will remain unchanged. This assumption isn’t unfounded, either. No rate hike this month has been something investors have anticipated for months at this point, and with much of the recent news on inflation being positive, it makes sense. The mounting evidence against a rate hike this month has led some investors to believe that the Fed might even start cutting rates sooner than expected, but that’s entirely speculation.

At the very least, investors want to know precisely when rates will be cut, and because of that, they’ll be watching this upcoming Fed meeting very closely. As we know, Fed language can strongly impact the market, and any level of certainty for a cut in the near future could be great for the market, with the caveat that the opposite is also true. Furthermore, if the Fed reveals that there will be no rate cuts in 2024, that could spell trouble for the current market rally, which is still full steam ahead. Soon, we’ll find out if investors have gotten a little too excited and dependent on early rate cuts. Realistically, it’s more than likely that Jerome Powell will say more of what he’s been saying for the last several months; it’s just a matter of current investor sentiment. Regardless, these last few weeks are sure to be interesting ones.

(Nasdaq ETF (QQQ) price from December 2022 - 2023 — each candle is 1 week. Chart provided by tradingview.com.)

PORTFOLIO UPDATE

Our portfolio moved along with the market, with some stocks inching up, some creeping down, and most sitting relatively flat. We’ve seen some significant gains over the last several weeks, and it looks like the more volatile stocks are taking a breather after that incredible run. We plan to hold all currently owned stocks for the foreseeable future. As always, thank you for reading, and happy investing.