Two weeks ago the talk was whether we would string three straight positive weeks on the various averages and indexes.
Something happened and what looked like a positive week turned negative.
You take the drop last week and now the talk turns to whether this will be three down weeks with the problems in Ukraine and the Fed’s coming rate increase.
And there are the earnings reports that can impact daily trading.
Last week Nvidia couldn’t have had a much better report and the stock sold off. It is almost trite to say the stock rose on the rumor and sold on the news.
Some attribute the recent selloffs to people taking profits while they can to build their cash position.
I suggest this is what markets do when they go up. They push up past reasonable levels and then step back.
I don’t see the Standard & Poor’s 500 stock-index moving below what I believe is a support level just below 5000.
That doesn’t mean a correction back to that point wouldn’t hurt.
People get so used to the markets taking out one record high after another that it almost seems inevitable after a while.
You have to factor into this speculation about the path of the indexes and averages that inflation is a fact and it’s too high.
That leaves traders wondering what the Fed will do and will it work.
The Fed’s track record in these situations leaves little confidence. They must raise rates and end the stimulus.
They should have started this last summer when the Fed was touting that inflation was transitory.
No wonder there is little confidence in Fed policies.
If that wasn’t enough, there’s an ever increasing amount of debt.
I detest taxes but that debt will have to be paid off. The only real solution is higher taxes and less future spending.
We approaching the mid-term elections and neither of those two choices will get anyone elected.
So, as interest rates rise, we will find ourselves in a deeper deficit.
Even our rather robust economy, which is strong no matter what the bad news makes you think, can save us from our indebtedness.
Spring is just around the corner and maybe sunshine and blooming flowers will keep our optimism intact.
My reality check is that oil and natural gas won’t go away anytime soon. You could say the same thing for coal.
China last week announced plans for future coal-fueled electric generation plants.
The Chinese will not stifle their economy to be environmentally friendly.
I told a friend the other day that he might look at Devon Energy.
It is far from a value, but it pays a decent dividend and its earnings have been spectacular.
He asked about a correction and I asked him how much his savings were earning. My thought: Take the dividend and wait this out.
There is nothing certain at times like this.
