Last week we did something the equities market hasn’t done in 90 years - the Dow Industrial Average completed its eighth down week.
The Standard & Poor’s 500-stock index dropped for seven weeks in a row.
Last week retailers reported a loss in revenue and profits.
There’s a realization inflation is impacting consumers who have supported the economy.
Further earnings reports this week hopefully will find improvement.
It seems the equities markets moved down a bit too much – so dramatic that we’re seeing analysts predict at least an interim move up.
There are suggestions that we’ve seen the bottom.
I have a hard time thinking that 3900 can be a bottom.
It could be an intermediary point until we take out 3600.
I’m not sure I would go as far that the bottom we’ll reach in October at 3000.
These rays of optimism are based on the premise that we’ve seen the worst of inflation and
many quality analysts are talking about what will happen nine months from now.
I’m concerned energy prices putting gas in your car is no picnic.
The Federal Reserve is always behind the curve and will continue to raise rates after inflation topped out.
They can’t even spell soft landing.
For traders, this market is right in their wheel house.
Financial stocks have been punished far too much.
JP Morgan stock dropped 25%.
Don’t forget that Warren Buffet purchased a significant position in Citibank.
I would have you look at Bank of America and Wells Fargo. Higher interest rates only help the bottom line of financials.
I would say though that should you have been wise enough to buy energy stocks summer before last, it might be time to take profits.
I clearly see oil going higher but greed is a corrupting personal trait.
You made significant profits. The only caveat I would have is that should your basis be that low, staying around to receive a decent dividend is a factor.
I must point out that the move to limit fossil fuels is far from dead no matter what happens in November.
As always, it is never a real profit until you take it off the board and cash out.
Another factor that you will experience this summer is the energy pass-through component of your electric bill in Texas and to great extent across the country, which will come in higher.
Just so you know, natural gas is going for over $8 an Mcf.
This time last year natural gas traded at around $3.
It will be another hit for consumers.
I believe the only thing that stops inflation are prices so high that consumers cut back.
That will take time and it will make turning this market around a difficult task.
That is not to say there won’t be positive moves for traders, but a sustained move up may not come until much later this year.
