Stocks jumped earlier this week as inflation readings continued to show a cooling from 40-year highs. For international stock funds, there are two new Buys here: Third Avenue Value Fund (TVFVX) and Janus Henderson Global Research Fund (JAWWX), recommends Rosario “Sal” Salamone, contributing editor of MoneyLetter.
The Consumer Price Index grew at an annual rate of 3% in June, down from 4% in May and 4.9% in April. This was the smallest increase since March 2021. (Keep in mind the US inflation rate hit a new high of 9.1% in June 2022, so the year-over-year math is favorable.)
Despite this good news on inflation, we expect the Fed to raise interest rates by 25 basis points at their July 25-26 meeting. However, it may be the final hike in this cycle.
Janus Henderson Global Research Fund (JAWWX)
If that is the case and given the resilience we’ve seen from the US economy, we may see the soft landing that has been elusive in the past. Historically, the Fed provides too much monetary tightening (usually because of the lag in understanding the effects of previous hikes). If the Fed is successful, risks for equity investors are dramatically reduced.
Since the last Hotline, returns for our four global indices were mixed. For the reporting period the S&P 500 was 0.6% higher (July 6 – July 12); the Euro Stoxx 50 rose by 0.2%; the Nikkei 225 gave back 4.2%; the Shanghai Composite finished 0.8% lower.
Recommended Action: Buy JAWWX.
