A holiday-shortened week and it couldn’t come at a better time.
We were able last week to post on of the worst losses for a week since 2020.
That was the year that the market dropped 30% in just weeks only to rally back.
One might say well maybe we will do that again.
The problem this time is inflation and rising interest rates.
Back in 2020, the Fed pumped money into the economy and cut rates.
The Fed today is cutting back on the money supply and raising rates.
The various indexes and averages have dropped over 205 since the highs in February.
The real question is where are we going from here?
I cannot see inflation dropping anytime soon.
I would suggest though that prices may not climb as fast as they have.
My real concern is that prices remain high and the economy slows down.
We already experienced a slowdown in the first quarter for GDP.
It doesn’t appear that this quarter is going to be better and probably will be worse.
This seems the formula for stagflation.
Whatever you want to call it, I don’t see this being over anytime soon.
The Fed is going to continue to increase rates with next month’s jump likely to be another 3/4 of a point, if not one full percentage point.
Good luck to the housing market.
Some say that cash sales will carry the market, but that just doesn’t make sense.
Housing prices have just gone way too far and will come back quickly.
I continue to get questions from friends as to when they should buy.
I am not one that tries to pick the bottom, I rather just try and make sure that the bottom has been made.
I can see purchasing quality stocks as they have come down significantly especially in the high tech sector.
I am going to wait, but as you are aware from reading this column over the years, what do I know?
Given that summer is officially here this week and we have a shortened week, I would say the best investment at this point is keeping yourself cool and calm. While that seems simple, in today’s world not so easy.
Maybe some time on a porch reading a good book.
I would suggest some other activities, but it is really hard to appreciate these summer days in triple-digit heat.
Being an optimist I foresee rain around the corner and good times ahead.
The problem with that concept is that it will surely happen, but the arrival date may disappoint.
Here’s hoping your summer gets better, as it can’t get much worse.
