Earnings & Goldilocks! Issachar Update: I realized some profits last week in extended stocks and expect to buy stocks after earnings this week! Our top sector weightings are in software, retail, medical, and finance, as they have delivered better-than-expected earnings and forward guidance. I sell stocks before earnings to avoid surprise drops, and if it gaps higher, I consider repurchasing them at alternative buy points. Missing a gap up in price is better than taking a loss. A 10% loss requires an 11% gain, and a 50% loss requires a 100% gain to break even, so risk management is essential. Issachar uses a risk management strategy to capture most of the up move in a bull market and avoid life-changing losses in bear markets. Our stocks are trending higher, and I expect this bull market to continue into the November election. All my investable money is in the Issachar Fund, so I am incentivized to minimize losses and maximize gains. (There is no guarantee that any investment will achieve its objectives, generate positive returns, or avoid losses.)
Market Update: This could be a pivotal week as Amazon, Apple, Google, Meta, and Microsoft release 4th quarter earnings and guidance! The S&P 500 and NASDAQ indexes are extended and due for some profit-taking, so this might be a good time to add money to the market. We are in the early stages of a new bull market that started last November with the Fed announcement of lower rates in 2024, so buying dips could be rewarding.
The market does not expect the Fed to lower rates on Wednesday but expects a rate cut in May. Friday’s employment numbers could be a market mover unless they are revised higher, yet again. Personal income was up .3%, but expenditures were up more at .7% in December. Consumers are doing what the government does, spending more than they make, which does not work in the long run. Currently, the US is showing strong growth, a lower rate of inflation, and a dovish Fed, making for a Goldilocks economy.
Social Security was one of the biggest buyers of US government bonds for several decades and currently owns about $3 trillion of the national debt. However, Social Security is bleeding so much money they can no longer loan money to the Treasury. A few years ago, foreigners owned 33% of our debt, but it has rapidly plummeted to around 22%. Sadly, the Fed will likely keep monetizing the debt that Congress spends by printing dollars out of thin air (producing more inflation) to finance unbalanced budgets. Let’s pray for God to raise up leaders that will bring us back to the values that formed our Constitution.
30-year Treasury yields started declining after the Fed pivoted away from higher rates in November. Rates bottomed at the end of December and have been trending higher since. Smaller stocks that borrow money to expand operations are more negatively affected than larger stocks, so focusing on big-cap stocks with accelerating earnings and sales might offer a better opportunity.
China has unveiled a massive $280 billion market bailout plan to halt the slide in Chinese stocks. Global central banks continue to print their way into prosperity, but this money-creation experiment will likely not end well. However, we will ride the wave while it lasts because the liquidity tide tends to lift all boats.
Bottom line: I have a bullish bias waiting to see how the market reacts to earnings, the Fed, and the employment report. The Goldilocks (not too hot and not too cold) soft-landing economy scenario seems to be driving the market higher. Oil is up about 10% this year, which could be problematic for the soft-landing narrative. However, the charts will reveal what the market sees ahead, and that remains my focus. Grace and Peace to Everyone!
A new command I give you: Love one another. As I have loved you. John 13:34
Investors should carefully consider the investment objectives, risks, charges, and expenses of the Issachar Fund. This and other important information about the Fund are contained in the Prospectus, obtained by calling 1-866-787-8355 or visiting IssacharFund.com. The Prospectus should be read carefully before investing. The Issachar Fund is distributed by Northern Lights Distributors, LLC., a member of FINRA/SIPC. Horizon Capital Management Inc. (HCM) is not affiliated with Northern Lights Distributors, LLC.
Important Risk Information: Mutual Funds involve risks, including the possible loss of principal. An investment in the Fund may not be appropriate for all investors. The Fund may hold cash positions when the Adviser feels that the market is not producing returns greater than the short-term cash investments in which the Fund may invest. There is a risk that the sections of the market in which the Fund invests will begin to rise or fall rapidly, and the Fund will not be able to sell stocks quickly enough to avoid losses or reinvest its cash positions into areas of the advancing market quickly enough to capture the initial returns of changing market conditions. The Adviser’s judgment about the attractiveness, value, and potential appreciation of particular asset classes and securities in which the Fund invests may prove incorrect and may not produce the desired results. Past performance is no guarantee of future results. Ratings are only one form of Fund performance and should not be used as the sole consideration in an investment decision. Opinions expressed are subject to change, not guaranteed, and should not be considered investment advice. There is no assurance these opinions or forecasts will come to pass, and past performance is no assurance of future results. For more information regarding the Fund, including current performance, please visit IssacharFund.com. 3108-NLD-01/29/2024
Dexter Lyons, Portfolio Manager
Issachar Fund (LIONX & LIOTX)
Buy Issachar Fund @ Schwab, Fidelity, or Online
Strategy, My Story, Biblically Responsible Investing (BRI)