Soft landing: is it still possible?

US stock rallied on Friday

Last Friday has been a positive day for Wall Street.

All three major US stock indexes have closed the market session at profit.

The S&P 500 closed at +2.28%, the Nasdaq ended the trading session at +2.56% and the Dow Jones closed at +2.13%.

The positive movement has been driven by the latest US employment report.

Soft landing: is it still possible?

On Friday, 7 January have been released the latest employment data which have shown that the economy added more jobs than analysts had predicted in December but with weaker growth in employee wages.

Investors have celebrated the latest report because they now believe that the Federal Reserve can ease the aggressive interest rate hikes.

After the job report, there is less fear of a wage-price spiral, this event takes place when employees ask for a pay rise in response to the high prices, and since they have more money in their pockets inflation can grow. This is exactly what the Federal Reserve is trying to avoid.

The soft landing can still take place, according to the latest job data, because the Fed’s monetary policy to fight inflation is working fine without going into a recession.

Sentiment Indicator – Fear & Greed Index

The market sentiment is at 47 in the “Neutral” mode which is higher than a week ago, when it was in “Fear” mode.

FedWatch Tool – FED rates probabilities



78.2% of investors are expecting the FED to increase the interest rates by 0.25% at the next meeting.

The remaining 21.8% are expecting a 0.50% rate increase.

The number of investors expecting a rate increase of 0.50% is getting lower compared to last week.

No other options are considered at this time.

The next FED meeting is on 1 February 2023.

Portfolio Update

I am monitoring the short positions on stocks and ETFs and I will act accordingly.

This will allow my portfolio to make a profit if the market drops.

My view remains bearish at the moment, based on the current economic situation and the current FED monetary policy.

I am expecting more downside in the upcoming days, however, I am aiming to make a profit regardless of the market direction.

If you are already copying my portfolio, please keep the copy open.

If you are thinking of copying me, now could be the right time, if you can invest for the long term (years).

Remember to copy the open trades to optimize the copy.

Remember to set the stop loss on the copy at the minimum level, so you don’t get stopped if there is a correction.

Thank you, everyone. Have a nice day!

Steps to follow to copy my portfolio automatically:

1. Create an eToro account here: https://federicamontella.com/go/etoro/

2. Verify your account and make a deposit of at least 200 USD (you can deposit in any currency, like GBP and EUR)

3. Go to my profile page: https://federicamontella.com/go/etoro-passionforprofit/

4. Start the copy (copy open trades and set the lowest stop loss possible, to allow some movement)

5. Enjoy, it’s all automatic. You will make passive income 24/7

Let me know if you have any questions.

 

Federica Montella

eToro Popular Investor

 

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Author: Federica Montella
eToro Popular Investor, food lover and blogger. Stock trader and Popular Investor at eToro. I am on a mission to find the best restaurants and food to eat.