Market Commentary

The Prudent Speculator Weekly Commentary is expertly curated every week as a valuable resource for stock market news, investing tips, business insights, and economic trends as it relates to value stock investing. In this week’s market commentary, we discus the AAII Sentiment, Valuations, Corporate Profits and more. We also include a short preview of our specific stock picks for the week; the entire list is available only to our community of loyal subscribers.

Executive Summary

Rally Extends – Poor Friday, But Stocks Gain for the Final Week of ’24

Quiet – Interest Rates & Econ Outlook Little Changed

Sentiment – AAII Bulls Pull Back & Bears Increase

Valuations – Value Stocks Reasonably Priced

Corporate Profits – EPS Expected to Grow in ’24

Calendar – Historical Stock Market Tailwind

Stock News – 2023 Winners & Losers

Rally Extends – Poor Friday, But Stocks Gain for the Final Week of ’24

Happy New Year! With the equity markets trading in a narrow range last week and little in the way of economic news released, we offer an abbreviated Market Commentary today.

Quiet – Interest Rates & Econ Outlook Little Changed

While we could have done without the final-day-of-the-year pullback, the major market averages managed to tack on modest gains over the last week of 2023, even as nothing much changed on the current interest rate front,

Interest Ratesnor with expectations for more than a few cuts in the Fed Funds rate in 2024.

Interest Rates

The odds of a recession in the U.S. over the next 12 months, as calculated by Bloomberg, remained at 50%,

Recession Forecast

while the Atlanta Fed took the week off from updating its Q4 real (inflation-adjusted) GDP growth forecast of 2.3%.


Sentiment – AAII Bulls Pull Back & Bears Increase

We suppose that there was a positive development in that the latest weekly Sentiment Survey from the American Association of Individual Investors (AAII) saw a 6.6-point drop in the number of Bulls and a 4.2-point increase in the tally of Bears.

AAII Sentiment Survey

Of course, the admonition to be greedy when others are fearful and our generally contrarian approach to investing argue that we would rather folks on Main Street be pessimistic about the prospects for stocks, but the historical evidence on the AAII Bull-Bear Spread and subsequent equity performance shows that the current 8th decile offers forward six-month average returns above the 37-year norm.

AAII Bull-Bear

Valuations – Value Stocks Reasonably Priced

So, while we must always be braced for downside volatility, especially after the big run equities have enjoyed since the October 27 lows,

Log-Term Returns

we see no reason to alter our enthusiasm for the long-term prospects of our broadly diversified portfolios of what we believe to be undervalued stocks.


Corporate Profits – EPS Expected to Grow in ’24

This is especially true, given that corporate profits are projected to grow handsomely in 2024,

Corporate Profits

while valuations for Value stocks remain very reasonable, relative to interest rates,

Russell 3000

and their historical averages on a price-to-trailing earnings basis.

Price to Earnings

Calendar – Historical Stock Market Tailwind

And, for those who have a shorter-term focus, we note that we remain in the seasonally favorable six-month time period,

Value Stocks


Stock News – 2023 Winners and Losers

Keeping in mind that all stocks are rated as a “Buy” until such time as they are a “Sell,” a listing of all current recommendations is available for download via the following link: We also offer the reminder that any sales we make for our newsletter strategies are announced via our Sales Alerts. Jason Clark, Chris Quigley and Zack Tart take a look at earnings reports and other market-moving news of note out last week for more than a few of our recommendations.
Kovitz Investment Group Partners, LLC (“Kovitz”) is an investment adviser registered with the Securities and Exchange Commission. This report should only be considered as a tool in any investment decision and should not be used by itself to make investment decisions. Opinions expressed are only our current opinions or our opinions on the posting date. Any graphs, data, or information in this publication are considered reliably sourced, but no representation is made that it is accurate or complete and should not be relied upon as such. This information is subject to change without notice at any time, based on market and other conditions. Past performance is not indicative of future results, which may vary.