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Weekly Changes

Another week has passed and the weekly changes are shown below. The Fed showed signs of softening its position regarding interest rate increases, although equity growth stock (QQQ) prices for the week did not reflect this position. Bonds and Gold were relatively unchanged over the week. The Dow and Tech stocks were off, around 3 to 3.5%.

Since 7/26 (base tracking point), Bonds have declined by 9% and Tech by over 4%. Gold and the DJI were up 4 – 5%.

The table below summarizes the results:

12/9/2022 Wkly Return Return from 7/26
ASSETS 7/26/2022 Last Week This Week
DJIA $31,764.00 $34,430.00 $33,476.00 -2.8% 5.4%
GOLD (GLD) $160.00 $167.26 $167.06 -0.1% 4.4%
TECH (QQQ) $294.30 $292.55 $282.00 -3.6% -4.2%
BONDS (TLT $116.84 $107.09 $106.33 -0.7% -9.0%

The changes week by week are interesting. But for any week they are little more than “noise” in the developing economic pattern. That will be so until the dam breaks (and it will).

Of more interest is the longer term period represented by the last column. Trends are showing here, although I believe they are just beginning and will become seriously pronounced as time passes.

Gold is beginning its rise while bonds have already fallen. The Fed’s interest rate policy (to the extent it has one) influences both. (Bond prices move inversely to interest rate moves. Higher interest rates strengthen the dollar versus other currencies, making the gold price rise in dollars appear to be less than in weaker currencies.)

High-priced tech stocks are reflecting the reality that growth estimates, even for the best of companies, are too high to justify current multiples. Relative strength in the DJIA likely reflects a defensive shift of market funds away from more speculative stocks (like those in the QQQ) toward larger, better capitalized stocks (like those represented in the DJIA).

My guess is that gold continues to strengthen while other entries in the table weaken. Do not judge these movements over short periods (like a single week). I am not offering market advice here as I am not a licensed financial analyst. These are my opinions. If you are going to change any investment strategies, consult with trusted, licensed professionals before doing so.

Time permitting, I will provide a more thorough analysis why I believe what I do. In the meantime, caution and defensiveness should guide your investing/trading.

 

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