[ad_1]
Stock Market This Week
Stock Market This Week – 06/24/23
Stocks had their worst week since the regional bank crisis in March. Investors likely exited positions to take profits and fear interest rates. Central banks in other countries hiked rates assertively, led by a 0.5% increase by the Bank of England. But Turkey, Norway, and Switzerland also raised rates. The U.S. Federal Reserve and other central banks remain hawkish, fearing high inflation more than a recession. However, the risk now is they overshoot and tighten too much when sentiment is weak and manufacturing is contracting. Also, the yield curve has been inverted the most since the 1980s. An inverted yield curve has occurred before most recessions in the United States. But the unemployment rate is 3.7%, and it is difficult to imagine a recession happening at such a low rate.
Stock Market Overview
As shown by data from Stock Rover*, the stock market had a poor week. All the major indices fell this week, with the Russell 2000 performing the worst. The S&P 500 had the best return for the week, followed by the Dow Jones Industrial Average (DJIA) and the Nasdaq.
All 11 sectors had negative returns for the week. Healthcare, Consumer Cyclical, and Consumer Defensive were the top three sectors for the week. But the Utilities, Energy, and Real Estate sectors performed worst.
Oil prices fell below $70 per barrel. The VIX dropped again and remained below the long-term average. Gold neared $1,900 per ounce.
The Nasdaq is performing the best for the year, followed by the S&P 500 Index, the Russell 2000, and the Dow 30. The Nasdaq is in the bull market territory. In addition, 6 of the 11 sectors are up year-to-date. The three best-performing sectors are Technology, Communication Services, and Consumer Cyclical. But the worst-performing sectors are Financial Services, Utilities, and Energy.
Affiliate
Try the Sure Dividend Newsletter for high-quality dividend growth stocks. The monthly detailed newsletter includes stock analyses, tables, charts, and portfolio ideas. Risk free 7-day free trial and $41 off only through Dividend Power for $158 per year. Sure Dividend Coupon Code – DP41
The dividend growth investing strategy is showing mixed results in 2023. The table below shows their performance by category.
Affiliate
Portfolio Insight has 9,000+ stocks and ETFs in its database. You can get access up to dozens of metrics, 20-years of financial data from S&P Global, and our Dividend Quality Grade.
The Portfolio Insight platform gives users access to portfolio management, charting, screening and ranking, investment news, SEC fillings, stock analyses, etc. Try it free for 14-days.
Stock Market Valuation This Week
The S&P 500 Index trades at a price-to-earnings ratio of 25.17X, and the Schiller P/E Ratio is about 30.35X. These multiples are based on trailing twelve months (TTM) earnings.
The long-term means of these two ratios are approximately 16X and 17X, respectively.
The market is still overvalued despite the recent correction and a bear market and rebound. Earnings multiples of more than 30X are overvalued based on historical data.
Economic News This Week
Provided by Stock Rover*.
Building Permits
The U.S. Census Bureau reported new residential building permits were up 5.2% in May to a seasonally adjusted 1.491M (-12.7%) below the May 2022 rate of 1.708M. Single-family permits were up (+4.8%) to 897K from an upwardly revised April figure of 856K. New residential building permits surged in the Northeast (+27.1%), followed by the Midwest (+7.5%), West (+6.0%), and South (+1.5%). Privately-owned housing starts surged (+21.7%) from a downwardly revised April estimate to 1.631M (+5.7%) above the May 2022 rate of 1.543M.
Single-family starts were up (+18.5%) to 997K, as single-family homebuilding increased in the Midwest (+59.1%), South (+21.0%), and Northeast (+8.8%); only the West decreased (-4.1%). Privately-owned housing completions reported at 1.518M, up (+9.5%) from an upwardly revised April figure of 1.386M, up (+5.0%) over May 2022. Single-family housing completions were reported at 1.009M, a (+3.9%) increase from the April rate of 971K, down (-3.3%) from May 2022.
Home Sales
The National Association of Realtors reported flat existing home sales with a slight 0.2% increase in May to a seasonally-adjusted annual rate of 4.30M, down (-20.4%) compared to May 2022. “Mortgage rates heavily influence the direction of home sales,” said NAR Chief Economist Lawrence Yun. This marks ten consecutive months of annual sales declines of 20% or more. Sales of single-family homes dipped (-0.3%) to a 3.85M yearly rate (-20.0% Y/Y), while existing condo sales increased (+4.7%) to a 450K annual rate (-23.7% Y/Y). Regionally the West (+2.6%) and the South (+1.5%) saw a boost in existing home sales, while the Midwest (-2.9%) and Northeast (-2.0%) both saw declines.
Total housing inventory increased (+3.8%) to 1.08M (-6.1% Y/Y). Properties typically remained on the market for 18 days, down from 22 days in April. Unsold inventory was reported at a 3.0-month run rate, up from 2.9 months in April and 2.6 months in May 2022. Seventy-four percent of homes sold in May were on the market for less than a month. The median sales price was $396,100 (-3.1% Y/Y). The median existing single-family home price was $401,100 in May (-3.4% Y/Y), while the median existing condo price was $353,000 (unchanged Y/Y).
Composite PMI
S&P Global reported that its flash U.S. Composite PMI Output Index, which tracks the manufacturing and services sectors, fell to 53.0 in June from 54.3 in May. While it is the lowest reading since March 2023, it marks the fifth straight month above 50, indicating growth in the private sector. Business activity was driven primarily by the services sector as manufacturing contracted. The services sector, although still in expansion territory, did show a softening as S&P
Global Flash US Services PMI fell to 54.1 from 54.9 in May. The S&P Global Flash US Manufacturing PMI dropped to 46.3 from 48.4, registering the fastest rate of contraction in new orders since December 2022. Chris Williamson, Chief Business Economist at S&P Global, commented, “the question remains as to how resilient service sector growth can be in the face of the manufacturing decline and the lagged effect of prior rate hikes. Any further rate hikes will of course have a further dampening effect on this sector which is especially susceptible to changes in borrowing costs.”
Resources
Curated Weekend Reading From Around The Web
Portfolio Management and Investing
Retirement
Financial Independence
Here are my recommendations:
Affiliates
- Simply Investing Report & Analysis Platform or the Course can teach you how to invest in stocks. Try it free for 14 days.
- Sure Dividend Newsletter is an excellent resource for DIY dividend growth investors and retirees. Try it free for 7 days.
- Stock Rover is the leading investment research platform with all the fundamental metrics, screens, and analysis tools you need. Try it free for 14 days.
- Portfolio Insight is the newest and most complete portfolio management tool with built-in stock screeners. Try it free for 14 days.
Receive a free e-book, “Become a Better Investor: 5 Fundamental Metrics to Know!” Join thousands of other readers !
*This post contains affiliate links meaning that I earn a commission for any purchases that you make at the Affiliates website through these links. This will not incur additional costs for you. Please read my disclosure for more information.
Prakash Kolli is the founder of the Dividend Power site. He is a self-taught investor, analyst, and writer on dividend growth stocks and financial independence. His writings can be found on Seeking Alpha, InvestorPlace, Business Insider, Nasdaq, TalkMarkets, ValueWalk, The Money Show, Forbes, Yahoo Finance, and leading financial sites. In addition, he is part of the Portfolio Insight and Sure Dividend teams. He was recently in the top 1.0% and 100 (73 out of over 13,450) financial bloggers, as tracked by TipRanks (an independent analyst tracking site) for his articles on Seeking Alpha.
Related
[ad_2]
Source link