Last week I gave you three stocks to consider as I thought the prospect of a bear market rally was rising. One of them is already up 20%.
The Fed sparked the rally late in the week by saying that future rate rises will be data-dependent, and it is clear data is starting to roll over as economies slow.
No one knows how high rates will go or what the path of inflation will be in the next few years, but Fed Chairman Powell’s comments were enough to ignite a relief rally.
The bear market rally looks like it could have legs, and let’s face it, it could be the beginning of the next bull market. But I remain concerned that there is a lot of resistance at higher levels.
That doesn’t mean the nimble trader can’t make money in this rally. Gold prices, in particular, have bounced from oversold levels as real rates dive. Gold stocks have underperformed the gold price, so I think there are some juicy pickings out there.
The US 10-year bond yield looks like it will confirm a monthly sell pivot this month, so odds are increasing that the short-term high in 10-year rates is in, and we could be in for a period of falling yields which will support equities.
In today’s ‘Closing Bell’ video, I have a look at all the markets mentioned above as well as the S&P 500 and give you a gold stock to consider.
Regards,
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Murray Dawes,
Editor, Money Weekend
