Not a particularly fun week to be invested in equities.
For the year, the S&P 500 is still up 11%. You should feel great if the majority of you holdings are in the Magnificent Seven.
Without those seven tech stocks, the S7P would only be up less than 1% for the year.
Those seven stocks make up 17% of the value of the S&P 500.
I mention these stocks as Amazon, Alphabet (Google), Meta (Facebook and Microsoft will issue earnings reports this week.
We will also get a CDP report for the 3rd Quarter.
It does seem that the Fed might sit on its hands for a while and let all that they have done over the last year play out.
That is not to say they are satisfied with the level of inflation, but it does take time to turn this around.
They certainly have not suggested that rates are coming down.
That leaves investors with some decisions for the end of the year.
There is a good argument that the S&P 500 could drop back to the 3900 level, as well as climb up to 4400.
It is hard for me to see a big pullback as earnings reports have been better than projected indicating a stronger than envisioned economy.
That is a lot given all that we are facing.
We have two wars, a growing debt crisis and a Congress that isn’t functioning.
I would usually be in favor of a listless Big Government, but we have issues that need and should be dealt with sooner than later.
I have looked for what the next Black Swan might be and there is much to consider.
We are dealing with serious adversaries in China, Russia and Iran.
I discount the last two, as long as we maintain our military strength.
China, on the other hand, is a real problem economically.
They see this as an economic war.
They steal at every chance they get and only get a pass as they pay off whoever gets in their way.
I am fully cognizant of the real cost of life from military conflicts, but economic problems have devastating impacts.
You have to look back at what shutting down the economy for the pandemic did to so many people.
We now face the price of that situation with little or no plan.
We have one side seeking to raise taxes and the other side cutting spending.
The problem is that we have little to cut and the more we raise taxes the more we raise spending.
So here we are at the official start of the Holiday season.
I fear not of the potential scary factors coming.
I respect the fact that there will be an impact and it is our ability to adjust that will be to our benefit.
Maybe it is time to look at putting some of that savings in Treasuries.
Some might suggest even looking out to 10 years.
I am sticking to short term.
Sometimes it is better to be safe than sorry.
