Gareth Soloway: Stock Market Slippage Explained, Gold’s Next Buying Level
With major indexes in the red and volatility running high, market participants are looking for answers about what’s happening and what may be next.
“Really what’s going on here is you now have a Fed that’s tightening, and we know that,” Gareth Soloway of InTheMoneyStocks.com told the Investing News Network.
“Next week we’ll see probably a 50 basis point rate hike, (and) the market is now pricing in further rate hikes for the rest of the year — and a potential slowdown in the economy because of that.”
Aside from that, Soloway noted that Netflix’s (NASDAQ:NFLX) earnings “shocked the market,” and left investors wary as they wait for other major companies to share their results.
“I think the big thing going into next week is how do these earnings shape up?” Soloway explained when asked what he’ll be looking for ahead of the upcoming US Federal Reserve meeting, scheduled for May 3 to 4.
He continued, “If we see a lot of these earnings come out and the stock market drops, let’s say 5 or 6 percent, by the time we get into this Fed meeting next week — I think it’s a foregone conclusion you’re going to see 50 basis points, but you may see slightly less hawkish Federal Reserve commentary.
Soloway believes it’s a trader’s market, but emphasized that he’s trying to be nimble because it’s easy to get hurt. For those who aren’t as agile, holding cash on the sidelines is an option — while this is less desirable when inflation is high like it is right now, it can allow investors to pick up quality names once they’ve bottomed out.
Speaking about his expectations for inflation, Soloway said that although the Fed is now moving to tackle it, high prices won’t dissipate overnight. In his view, gold and other metals are the best place to be for protection.
He remains bullish on gold, but noted that the yellow metal will likely move back to US$1,825 to US$1,850 per ounce before moving higher. “My fear is that I do think you still have a little bit more downside in gold … but this (level) is going to be the best buying opportunity,” Soloway explained.
Watch the interview above for more of his thoughts on gold and the overall markets.
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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.