Stocks rallied last week after the Federal Reserve indicated it might slow down the pace of interest rate hikes.
We decided to buy back into stocks today because:
1. Investors are pessimistic and market technicals positive.
2. The market was able to ignore a bad inflation print on 13 October. Rallying on bad news is often a positive signal.
3. The European gas situation has improved.
4. It is hard to see where the next bad news that will drive stocks lower will come from, until the US economy deteriorates further early next year and investors finally have to accept that a recession is inevitable.
This is a tactical position which we expect to hold towards the year end. The target is 4000-4100 on the $SPX500 . We still expect the index to hit 3000 next year.
Positions were initiated in $C (Citigroup), $LLOY.L (Lloyd’s Banking Group PLC), $BARC.L (Barclays), $E (Eni SpA), $AMUN.PA (Amundi SA), $SHEL (Shell PLS (ADR)), and $TTE (TotalEnergies SE) .