I’m hearing some chatter that says bond traders and analysts are stepping aside from the bond rally. Or are planning to do so. Their argument is that the move has been too far, too fast. Specifically, I’ve heard talk of selling if the yield on the 10-year Treasury hits 4.00%. On Friday, the yield was 4.20%. So I’d be watching to see if anything like a bond rally pause or reversal materializes during the days ahead of the Federal Reserve meeting on December 13
Oil declined for a third day with U.S.benchmark West Texas Intermediate falling another 0.73% to $74.99 a barrel. International benchmark Brent crude fell 0.65% to $80.06 a barrel. OPEC meets on November 30 and there’s good reason to doubt that the cartel will agree to cut production even in the face of falling oil prices.
So what do you do with your portfolio for the rest of 2023? And what’s your best strategy to be prepared for 2024? In Part 1 of this Special Report I laid out the 10 developments that I thought would drive the financial markets for the rest of 223 and into 2024. Today, in Part 2, I’m going to give you the first 2 of 10 moves to take–with as much detail and as many specifics as possible–that you should be making now to position your portfolio for the uncertainties of the last quarter of 2023.
After the market close today, Microsoft (MSFT) announced earnings of $2.32 a share, just beating Wall Street forecasts of $2.30 a share. That was a 6.5% drop from the December 2021 quarter, however. Revenue missed expectations at $52.7 billion versus a forecasted $52.9 billion. But the big news was that revenues for Azure, the company’s key cloud computing software unit, rose just 31% year over year in the quarter. That badly trailed Wall Street forecasts that called for 36.8% year-over-year growth in the December quarter.
Today I posted my two-hundred-and-twenty-first YouTube video; Trend of the Week Oil is Back for 2023. This week’s Trend of the Week: Oil is Back for 2023. We’re looking at a great set-up for oil going forward into 2023. Oil performed well in 2022, so it’s going into 2023 with strong recommendations from Wall Street strategists to “Keep it up.” We also may be hitting “peak oil” in Saudi Arabia, (like we talked about—for those who are old enough to remember- back in the 80s.) So Saudi Arabia and Russia, two big players in the commodity, are both constrained on oil production capacity. Additionally, we’re seeing a shift in the United States to becoming a net oil exporter. Oil has sold off, as United States Oil Fund (USO) shows, with the price n December 26 at $69.32. But it now looks to be in recovery and this looks like a good entry point. There is some resistance with the 50-day moving average at $69.64, but I don’t think it’ll be a problem to get back up to the November peak of 76. So what do you buy? USO gives you an overall market exposure in oil, but if you’re looking at an oil producer for more leverage, look to someone with a lot of oil exposure in the oil shales in the US, like ConocoPhilips (COP).
There were very few places to hide in this week’s stock market decline. A number of the old reliable places to hide aren’t providing much protection in the current stock market drop. But I did see two splashes of green today among the sea of red.