We made it through April closing at 4169 for the Standard & Poor’s 500 stock index.
Just like January, equities had a great month.
Now on to May where the old saying goes to sell in May and go away.
Not so sure about that but we do have several things to digest.
This week, the Federal Reserve will meet and probably hike the Fed Funds rate by another 25 basis points getting the rate over 5%.
We will get a jobs report this week and there will be more earnings reports from the likes of Apple, Anheuser-Busch, Starbucks and Ford.
On top of all that, we had JP Morgan take over Frist Republic.
I was sorely tempted to buy First Republic as a value play, but held back thankfully.
The stock and bondholders will end up with nothing.
It just expands JP Morgan to become an even larger bank.
This is a great example of when people become disenchanted with a company, they can abandon it literally overnight.
Also the rich get richer in the likes of JP Morgan.
This is the part of free enterprise that isn’t pleasant to watch.
It is zero sum game in that some win at the expense of others.
The debate now shifts to what will happen with the debt ceiling.
The current administration is stipulating that there is nothing to discuss, but there are already cracks in that position.
The ceiling will be raised no matter what in my opinion, but negotiations need to begin.
If the legislature is stonewalled now, it will be a vicious battle over the budget.
It just seems a bad time for the administration to dig its heels in with an election on the horizon.
Probably a much to do about nothing.
Besides, the less done in DC the better for the economy.
I would suggest yet again that the economy is doing rather well for all the predictions of a coming recession.
I understand the rising cost of doing business due to the rise in interest rates and the constraints on lending due to the recent failures of SBB, Signature and First Republic since just March.
Those are hurdles that can be overcome but it will be at a cost.
It seems to me that we will continue to grow but at a slower pace.
Some will call that a recession who can’t even spell economics.
The easy money days are gone and I doubt they come back any day soon.
That is not so say that some other significant unexpected event can’t be coming just around the corner.
We have Ukraine, Sudan, Iran, Taiwan on the foreign affairs front.
No one saw the banking crisis and we have a huge debt looming over this country.
It would be far too easy to not only slip on the ice but to fall through.
