The Stock Market Begins Quarter Number Two
April has historically been one of the top performing months since 1950
Welcome to the +343 new subscribers who joined our Dividend Investor’s Edge community this past week. If this is your first time reading, but you have not yet subscribed, join our fast growing investing community of ~8.3K investors.
Cash Flow University is an online community focused on building passive income and stable wealth. Learn about building passive income through: Options Selling, Short-Term Rentals, Amazon/eBay Flipping, and More. There are a number of rooms lead by leaders within the space both showing how they are building passive income and educating community members. The Cash Flow University community has grown to well over 300+ members.
Click HERE to give CFU a try today!
*This is sponsored advertising content.
Market Talk ⏪
Best Quarter since Q4 2020: The stock market just concluded its first quarter for 2023, a quarter in which the S&P 500 was up over 7%. That is a solid start to the year, but that is nothing compared to the gains we saw in the tech heavy Nasdaq, which saw Q1 gains of nearly 17%, marking the best quarterly gain since the fourth quarter of 2020.
US Bonds: US Treasuries increased in the month of March, after many investors, especially after the mini banking crisis, expected that the Fed would be done with increasing rates and that we would potentially see rate cuts in the back half of the year.
What worked in ‘22 is not working in ‘23: Two of the best performing sectors in 2022 included Energy and Health Care. Energy was a big winner in 2022, with stocks like Exxon Mobil seeing gains over 70% during the year. However, these two sectors have lagged in 2023, as technology has been the big leader thus far. The Health Care Select SPDR and the Energy Select SPDR ETF are both down 4% and 1%, respectively, in 2023 thus far.
Stocks love April: If we go by history, well then April should be another good month for stocks. Historically, when it comes to the Dow Jones Industrial Average in particular, April has been the top month for returns. The average return for the month of April, dating back to 1950, is 1.9%. Adding to that, the Dow has increased 3.9% in the month of April in years preceding an election since 1950. For the S&P 500, April has been the 2nd best month for the index. April 2022 was the first negative performance in that month since 2005 for the Dow Jones Industrial Average.
On Pins And Needles: Regardless of the optimism within the stock market, or at least the appearance of optimism, investors still seem like they have more questions than answers. Investors are continuing to look for clues on the economy, which we will get with a new jobs report this week. Investors are also looking to figure out the strength or lack thereof of the US consumers. Lastly, trying to figure out a Fed’s monetary policy plan that recently got raised. We have been here before. Investors not believing the Fed, yet the Fed continues with the same wording on defeating inflation. One report that came out over the weekend regarding the labor force was the fact that McDonald’s is temporary closing their US offices as they prepare for layoffs, which are expected early in the week.
Earnings Declines On The Horizon: We are still about two weeks away from the kick off of earnings season, which could be ugly as we start to truly see a lot of deterioration in those moving forward, which could be a huge headwind for stocks. Optimism remains high, but the full impact of all these rate hikes combined with a mini banking crisis are yet to be priced in.
Jobs Report On Deck: On Friday we are expected to get an updated jobs report which will have a huge impact on the near term direction of the markets. Economists are looking for 235,000 added jobs from March, which would be a decrease from the 311,000 added in February.
Deep Dive 📰
Become a PREMIUM subscriber today for ONLY $1 PER DAY and take your investing to the next level. Premium subscribers receive the following:
Monthly Portfolio Updates
2 Individual Stock Deep Dives Per Month
Top 5 Dividend Stocks Newsletter (NEW)
Last week we published our latest Stock Deep Dive on American Tower Corporation (AMT). Premium subscribers can check this out HERE.
Let us do the heavy lifting, choose to go PREMIUM today!
US Markets 🇺🇸
Here is a performance summary for US Equities:
Here is a look at US Treasuries:
The Fear & Greed Index measures market sentiment based on the following seven factors: put/call ratios, junk bond demand, stock price breadth, market volatility, stock price strength, safe-haven demand, and market momentum.
When it comes to the Fear and Greed Index, the markets just saw its strongest quarter since 2020, and as such, the Fear & Greed Index has gone from Extreme Fear a month ago, to fear, and now to Neutral. Currently, the index has a reading of 49, which is slightly up from the prior week reading of 34.
Earnings on Deck 💰
The earnings reports for the week:
Dividend News 📝
Here are some notable analyst upgrade/downgrades from the previous week:
Argus upgrades J.M. Smucker SJM 0.00%↑ to buy from hold
Baird downgrades Caterpillar CAT 0.00%↑ to underperform from neutral
BMO upgrades Equinix EQIX 0.00%↑ to outperform from market perform
Bank of America upgrades Paramount PARA 0.00%↑ to buy from neutral
Morgan Stanley names Emerson Electric EMR 0.00%↑ as a top pick
UBS downgrades Medtronic MDT 0.00%↑ to sell from buy
JPMorgan upgrades Philip Morris PM 0.00%↑ to overweight from neutral
Evercore ISI upgrades Walmart WMT 0.00%↑ to outperform from in line
Morgan Stanley downgrades Charles Schwab SCHW 0.00%↑ to equal weight from overweight
This Week 📆
Monday
Construction Spending
ISM Manufacturing
Tuesday
Factory Orders
JOLT Report
Wednesday
Mortgage Application
ADP
Trade Balance
ISM Service
Thursday
Initial claims
Friday (Market CLOSED)
Nonfarm Payrolls
Consumer Credit
Other Resources 📺
If you have not done so yet, definitely check out my growing YouTube community where I publish weekly videos on Dividend Stocks I am looking at.
Here is a look at my latest video: 4 Dividend Stocks To Buy In April 2023
Here is the other video I published last week: The New Look SCHD: Still The Best Dividend ETF
Here are a few others of my latest videos:
Skip AAPL and Buy This Dividend Stock Instead
This REIT Is The Next Realty Income
3 MONTHLY Paying Dividend Stocks To Buy
SCHD vs JEPI | Which Dividend ETF Is The Better Buy?
Top 10 Dividend Stocks For 2023
The Power of Compounding Dividends | Dividend Snowball Effect
If you enjoyed the newsletter, leave a LIKE and COMMENT down below. Also, if there is someone that could benefit from this newsletter, consider sharing it.
Subscribed
Have questions? You can email me directly at Mark@RoussinFinancial.com.
Happy Investing!
Mark
Thank you for sharing such an insightful post on the recent market performance. It's encouraging to see the gains made in Q1 2023, particularly with the Nasdaq showing impressive growth. However, I can't help but wonder how sustainable this positive trend is, given the current global tensions and the possibility of a looming war.
Do you think the stock market will continue to thrive despite these uncertainties, or should we prepare for a potential downturn? I'm looking forward to hearing your thoughts on this.