Why the Fed Cycle, Market History, & Big Money Clues All Say...Buy Stocks!

Why the Fed Cycle, Market History, & “Big Money” Clues All Say…Buy Stocks!

Sam Stovall is Chief Investment Strategist at CFRA Research. Jason Bodner is Co-Founder of Mapsignals.com.

MoneyShow’s Mike Larson sat down with both of these qualitative and quantitative market experts at the 2023 MoneyShow/TradersEXPO Orlando to get their take on the markets for a MoneyShow MoneyMasters Podcast double episode.

And boy did they have a double-helping of bullishness to share, based on their research and their signals. That was at the very end of October…which was almost the EXACT bottom for the stock market.

It was also followed by the strongest rally for the S&P 500 and Nasdaq Composite since 2021.

Why the Fed Cycle, Market History, & “Big Money” Clues All Say…Buy Stocks!

If Sam and Jason are right, we’re just getting started. In this interview, Sam highlights that “history is a guide, not gospel.” But since World War II, stocks have returned almost 6% in every fourth quarter of a pre-election year when you have a first-term president in office. Sam goes on to explain why he believed the July-August-September pullback was just a correction of “euphoria” in markets, particularly the Nasdaq, rather than the start of a new bear market. He further discusses the Federal Reserve interest rate cycle and how you typically see a 13% gain in the S&P 500 in the nine months after the Fed stops raising them. Then he finishes with a discussion of his favorite sectors for 2024.

As for Jason, he explains the history and mechanics of his firm’s Big Money Index (BMI). He notes that it used to be his job on Wall Street to “hide large trades for really large people,” and how his firm now tracks unusual institutional accumulation and distribution for clients. He adds that the BMI (at that time) was below 19% — something that happened 18 times since 2016. Those occurrences were followed by rallies 100% of the time. Not only that, but in his words “The markets were higher one month, three months, six months, nine months, and 12 months later, with phenomenal forward returns.”

The bottom line? Both guests thought buying made sense at the end of October…and the rallies since then have proven them right. Plus, they both still think the outlook is positive heading into 2024. Your next chance to catch Sam & Jason in person is the Investment Masters Symposium Sarasota, scheduled for Dec. 4-6, 2023 at the Hyatt Regency Sarasota. Click here to learn more about the conference – and to register.