Last week was no fun at all. It almost reminds of the line from the Jack Nicholson movie where he is testifying in a court martial and tells the prosecuting attorney that he couldn’t stand the truth.
The Fed has consistently said that will raise rates to or above 5%.
Before the announcement on Wednesday, the various averages and indexes were up.
Here comes the totally predictable 50-point increase and the market falls off a cliff.
Here is the worst part: the Fed Funds rate is not yet at 5%.
Inflation is slowing, but still far ahead of 2%.
There is obviously a lag in slowing inflation and we only started this journey less than six months ago.
It seems so ridiculous to think the Fed will change anytime soon.
The last rate increase was lower than the previous increases and we should not get another increase until February.
That will provide time for more data.
Hopefully the Jolly Old Elf rally is not completely off the table.
In reality we have dropped over 5% in the S&P 500 stock-index in December.
The index is below 3900 and was unable to climb above the 200-day moving average.
Hopefully investors will take these two months and concentrate on the real essence of the matter which is earnings.
Analysts over the weekend warned of a drop to the 3000 to 3200 level.
The increasing negativity is beyond the pale.
I did not see last week coming.
I was thinking that there would be a Santa Claus rally and that I would be selling off some of the gains in certain stocks over these last two weeks.
So much for that thought. Just shows you how wrong you can be when you are sitting here each day paying attention.
It is no wonder that Warren Buffet said that most people should take the money in their retirement accounts and place it in a S&P 500 stock-index ETF and get on with the rest of their lives.
As always, the market provides when it takes away.
Should we get a significant pullback, then I am ready to pick up some real value.
I have to say that most years the good times at the end of December and the first two weeks of January are about it for markets most years.
It is not that hard to predict that a pullback is on the horizon.
We have yet to even deal with whether we are in a recession yet.
So with all that great cheer, I wish you a Merry Christmas.
If you gain no other from me, patience will win out.
The day to day is interesting, but far from material to the ultimate outcome.
So enjoy the holiday season, as next year and the years to come will be here and gone far too quickly.
Worry never earned anything.
