The Weekly Update 9/15/2023
When we printed the July update for The Seven Signs of a Changing Economy™, money flowing in had pushed the S&P 500 into a “bullish” (positive) performance trend. It did this by increasing +20% from the prior low. That happened when the S&P 500 closed at 4293.93 on June 8, 2023. As of September 8, 2023, the S&P 500 has inched up to 4457.49. Thus, the trend change up to positive last July remains!
Interestingly, the mutual fund money flow, as measured by Refinitiv Lipper U.S. Fund Flows (9-6-2023), report a continued outflow (selling) by Mr. & Mrs. 401(k). Here is the trend for 2023 through September 6, 2023.
- January -$4.21 billion
- February -$14.6 billion
- March -$23.435 billion
- April -$31.32 billion
- May -$23.01 billion
- June -$7.70 billion
- July +$1.6 billion
- August -$31.6 billion (the largest outflow month of 2023)
The “Bull/Bear” Sentiment Summary confirms this fear level of selling as 67.7% of those surveyed remain neutral or bearish (negative), with just 32.3% of the investors surveyed bullish (positive).
Odd, I think, that the values of Corporate America rest at values just 138 points below the YTD high, and the folks are scared and selling.
To which the question would be… To whom?
Corporate America is the other side of many of the Mr. and Mrs. 401(k) sells. Corporate America has hundreds of thousands of CPA’s, MBA’s and attorneys crunching the valuation numbers. History has proven they are very astute on when to buy and when to sell. To me, it makes no sense to be on the sell side based on all we know.
No one, including me, knows the future, but until the valuations of Corporate America noted above drop by 20% from the current peak of 4588.96 down to 3671.17, Corporate America, as measured by the S&P 500, is in a bull (positive) market trend!
I’m interested in your thoughts, comments, and observations. Feel welcome to call, email, or stop by the office and say Hi.
James O. Lunney, CFP®
CERTIFIED FINANCIAL PLANNER™ Professional
Securities and advisory services offered through LPL Financial, a registered investment advisor. Member FINRA/SIPC. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments.