Another week of gains pushing the consecutive week total to seven.
This is the last full week of trading and it doesn’t seem the Grinch will have his way this holiday season. Chairman Powell’s Fed speech last week lead to speculation of multiple rate cuts next year.
I obviously was listening to a different speech.
The New York Fed President Williams was interviewed Friday on CNBC and pulled some of the optimism about rate cuts back.
His opinion was that the fight against inflation was far from over.
He acknowledged things are much better at the end of the year than it was in January. He was adamant in emphasizing though that the data will dictate and it has yet to prove the work of the Fed is done.
I do not understand all the concern expressed over high rates at this point.
I recognize the impact it will have on servicing the U.S. debt and the refinancing of loans taken out a decade ago at literally zero percent. While it will cut into earnings, I do not see how that can become a recession. Unemployment has got to go up due to employers being unable to push through higher prices.
That in and of itself doesn’t not define a recession.
It may temper profits a bit.
That is what I see for next year.
Consumers have maintained their spending habits, but their debt load has grown significantly.
The Christmas season will not help that situation. Moreover, the last couple of years’ rise in prices are eating away at any gains in salary.
The inflation rate may be slowing, but that doesn’t mean prices are coming down, if at all.
The fact that they aren’t increasing as fast as before just means I still have to pay more.
I will say that Santa has set us up for a wonderful end to the year as far as the value of your retirement or investment portfolio.
We are at record highs for the S&P 500 and predictions for further growth in 2024. The most prevailing question I get these days is what I invest in now.
There is little or nothing on the discount rack.
More times than not, it’s best to sit and enjoy the music.
Getting in at the top has long been a problem for investors unfamiliar with markets. The news is all great until it isn’t.
We lose investors permanently who only get in when the news is great.
I would say though that the greatest thing about equities investing is there is so much to choose from.
You have tens of thousands of companies beyond the Magnificent 7, many of which pay over 6% in dividends that are quality companies with growth potential.
That may not sound exciting, but losing money is no fun at all.
So enjoy the Holiday season and your new found wealth.
