• Current read is 20 on the fear greed index vs 27 last week.

• I put this closer to 50. The market just off ATHs so neutral.

• Market Fearful = Potential Opportunity/Deals. (consider buy calls/sell puts/buy shares)

• Market Greedy = Potential Over Valuation. (consider buy puts/sell shares/take on less risk)

• I like to be bullish when there is extreme fear

• I like to be bearish when extreme greed.

• Opportunity is out there, just gotta find it!

• 30 year fixed mortgage rate up to 6.20% Today, vs 6.07% last week.

• 10 year treasury bond yield rose to 4.28% Today, vs 4.14% last week

• 2 year treasury bond yield rose to 3.73% Today, vs 3.56% last week.

• Bond yields increased a little bit this week over concerns with the Iran conflict and higher energy prices potentially causing sticky inflation.

• As I always say, interest rates are gravity!

• As interest rates/bond yields DECREASE, stocks become MORE attractive because bond yields go DOWN which makes the risk free bond look LESS attractive.

Let’s Break It Down:

Upcoming Week Market Outlook | Week of Monday, March 16th

Last Week Recap:

This past week we saw continued volatility in high beta names as Mr. Market is still confused on how to price things…

That will likely continue with the Iran situation, slightly elevated valuations, inflation fears, weak jobs data, oil prices, & some concerns around AI data center funding.

This is where the emotional side of investing crushes people. You need to stay level headed. Know what you own and why you own it. Keep your ratios in check so you can survive volatility and capitalize on it. As prices fall while EPS keeps growing, that creates buy the dip opportunities in great companies.

Right now I believe the S&P 500 and Nasdaq are roughly 5 to 10% overvalued. Markets can easily fall 20 to 30% below fair value if the macro environment turns worse. That could mean another large drop from here. I do not think that is likely, but it is possible and you need to be prepared for it.

We just came off back to back 20% years in the market. Earnings growth did not justify that level of expansion, so valuations are stretched. A pullback is normal and healthy.

On the macro side, inflation is close to the Fed’s 2% target with CPI at 2.4%. Real time data from Truflation is even lower around 1%. If inflation continues trending down it gives the Fed room to focus more on the labor market and potentially cut rates later.

The labor market data overall came in solid. Jobless claims were fine, job openings came in above expectations, and layoffs from the JOLTS report were lower than expected. In simple terms companies are still holding onto workers, which means businesses still feel confident about demand.

Housing was mostly neutral. Existing home sales rose 1.7% and the median home price is basically flat year over year around $398K. Activity in housing matters because when people buy homes money starts moving throughout the economy.

GDP came in at 0.7% vs 1.5% expected which shows the economy is slowing slightly but still growing. Trade data and imports also skewed the number lower.

Overall I expect volatility to continue. Nothing changes about the strategy though. We buy great companies with strong competitive advantages and pricing power when they trade at good prices. Options are only used to magnify high conviction setups.

Keep your ratios in check and you will not lose sleep during volatility. We are investors, not speculators. The goal is to operate through both bull and bear markets while sticking to a disciplined plan.

Monday March 9

We will continue to monitor how the market reacts to the Iran situation. Oil and defense stocks will likely remain volatile. My thesis is still that WW3 is not here, but this situation will create some market swings.

Volatility should never catch us off guard. My portfolio is always positioned to handle both upside and downside. Focus on filtering signal from noise.

Empire State Manufacturing Survey
This gives an early read on manufacturing activity in New York. Positive numbers signal expansion while negative numbers signal contraction. It is one of the first manufacturing reports each month so investors watch it closely.

Industrial Production
Measures output from factories, mines, and utilities. It helps show how strong the industrial side of the economy currently is.

Capacity Utilization
Shows how much of total production capacity is being used. High readings can signal inflation pressure while low readings suggest economic slack.

Earnings (nothing major)
Dollar Tree
Deeper breakdowns will be posted in Discord.

Tuesday March 10

Pending Home Sales:
Tracks homes that are under contract but not yet closed. Since contracts typically close one to two months later, this is a leading indicator for future housing activity. Housing is important because it impacts spending, construction, lending, and many parts of the economy.

Earnings (nothing major)
Lululemon
DocuSign
Deep dives will be in Discord.

Wednesday March 11

(most important day)

Producer Price Index (PPI)
Measures price changes that producers receive for goods and services. It is often a leading indicator for consumer inflation since rising producer costs can eventually get passed on to consumers.

Factory Orders
Shows demand for manufactured goods across the economy including both durable and nondurable goods. Rising orders signal stronger demand while declining orders can signal slowing economic momentum.

FOMC Rate Decision and Powell Press Conference
This is J Powells second to last press conference. We will see what he has to say about the overall economy and inflationary environment. Given that rates are at 3.5% now for fed funds and terminal is priced to be around 2.75%, rates become less important the closer we get to terminal.

Earnings
General Mills
Macy’s
Micron (most important)
Five Below

Micron will be the most important as it gives insight into the semiconductor and memory chip market.
Deep dives will be posted in Discord.

Thursday March 12

Initial and Continued Jobless Claims
Initial claims show how many people are newly filing for unemployment. Continued claims show how long people remain unemployed. This gives a real time read on labor market strength.

Philadelphia Fed Manufacturing Survey
Another early read on manufacturing activity including new orders, shipments, employment, and prices.

Wholesale Inventories
Measures goods held by wholesalers. Rising inventories can signal slowing demand while falling inventories can suggest strong demand.

New Home Sales
Measures sales of newly constructed homes and provides insight into demand in the housing market.

Earnings
Alibaba
Accenture
FedEx
Deep dives will be posted in Discord.

Friday March 13

No major economic reports.

No companies report earnings.

Final Thoughts

I am not worried about the Iran situation or oil prices. This will likely not cause a lasting inflationary effect and move interest rates in the long run. Give this time to play out. Be patient & keep emotions in check!

We are wrapping up Q4 earnings season, and I will be continue to break everything down in real time inside Discord, I am continuing to look for opportunities while keeping risk and ratios in check.

Given that valuations are more compelling, I am finding more deals to capitalize on now. But now betting the house… Slowly dabbling as things become cheaper & long term prospects continue to look better.

This is exactly why I focus on long dated option contracts (1+year), buying calls and selling portfolio secured puts, not cash secured puts. Keep ratios & emotions in check!

I will see you all next week!

As always, I am rooting for you and want nothing but wealth & health for you & your family!

-Brandon

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