Market Risk Report as of October 2, 2023

From Chief Investment Officer Tom Veale,

The end of September was welcomed by many investors. It was not a particularly generous month so watching it pass into history should make some smile. As we start October’s market we see our Market Risk Indicator (MRI) down slightly again and moving toward its Median value. As shown, it has taken nearly a 7% drop in the S&P 500 since it’s summer high point to bring the MRI down this far.

SignalPoint’s Relative Valuation Index is still just above its cautious threshold while the other three components of the MRI remain neutral or even modestly proactive. Overall, the MRI’s posture is better than it’s been in over a year.

Words like “Stagflation” and other market worries are still in the financial press but it is too soon to know if these concerns will become reality. We continue to adjust share inventories to accommodate what we’re seeing in the various business sectors. Of those sectors, only the Energy sector remains priced above its 26 week moving average. The others have fallen prey to the September blues. Even so, Hawaiian Electric (HE) remains the worst performer in Value Line’s 1700 stock universe over the latest 13 weeks. At roughly 1/3rd the share price seen in July, 2023 it has suffered a huge sell-off after the tragic fires on Maui. Class action lawsuits are piling up against HE and finger pointing, so far, hasn’t helped those residents who have suffered.

Best regards,

Tom Veale

The MRI comes in at 28 this week, down another point from a week ago. The MRI Oscillator is still pointing to slightly lower risk profile with a minus 2 reading.

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