For all the talk of a bear market and the lack of a Santa Claus rally, the Standard & Poor’s 500 stock-index has been able to climb over 3% so far this year.
While people can find anything to suggest that something else will happen, it has been noted that more times than not that the markets tend to follow how it starts the year.
To do so, it will have to climb the wall of worry about higher interest rates.
In a couple of weeks, the Fed will announce its latest take on the economy and will probably move rates up.
I would think the Fed will raise by another 50 basis points.
That will move the Fed Fund’s rate to 5%.
This is a target that I believe they have sought for some time.
Once they get there - whether through two, 25-point moves or just get it over with - there will be time for evaluation.
People tend to ignore how much money the Fed takes off the debt table.
All this is shortening the money supply.
I believe that corporate America is waking up and starting to cut expenses.
It is almost a daily ritual for another company to announce job cutbacks.
So much for not finding enough workers and everyone staying at home to work.
To say that we may move back to a life we knew pre-COVID is an understatement.
That does not mean that low-level paying jobs are not being filled.
It is my belief that much in the service sector will be taken by automation.
The real price for what you do is how unique you are.
If anyone or anything can do your job, you are seriously in trouble.
The earnings so far have been mixed.
You have Salesforce that seriously underperformed. On the other hand, the streaming wars seem to have a true leader in Netflix.
While the tech sector was punished, it now finds favor as a value play.
The energy sector has crude down to $80 and natural gas at the lowest level in a year, while energy companies still are printing money.
It seems that all is not so bad, but far from great.
We seem to have established a floor at 3800, while many predicted moving much further south.
We are getting a churning of winners and losers that results in market volatility, but not establishing a clear trend.
It appears that we are moving into new territory. One such area is the call to make climate change the center of all that is important.
I am not a denier, but I would suggest that we should also really address the real problem predicted over 2,000 years ago: We have far too many people.
Addressing the best answer to that problem will be the hardest and most important issue, with no easy unanimous solution and it is getting worse faster than you can imagine.