Well, the long-awaited recession may never come or it was here and we just didn’t notice.
Last Friday, so much for the financial sector disaster, as JP Morgan, Wells Fargo and Citibank announced greater than expected earnings.
We now find ourselves with the Standard &Poor’s 500 stock-index above 4500.
There are now calls for the index to climb to 4800.
Why stop there when 5000 is just around the corner.
While that sounds remarkable, the NASDAQ has shown far greater strength lead by the Magnificent Seven.
That moniker bestowed by James Cramer includes Meta, Alphabet, Amazon, Microsoft, Nvidia, Apple and Tesla.
Hopefully you got on board as the rocket has yet to flame out.
That brings me to my concern.
I am not necessarily a contrarian, but it does begin to bother me when almost everyone is positive on the equities markets.
It seems amusing though that for all the concern that interest rates were going to force a recession and ruin the economy, we are experiencing growth.
Last week, our measure of inflation, CPI, came in at 3%.
That is not that far from the Federal Reserve’s goal of 2%.
I distinctly remember all the fear mongering about how interest rate increases were going to kill growth.
The only possibility was for the Fed to reverse course, aka pivot, and begin reducing rates.
It is just phenomenal that our memories are so short that we have come to the conclusion that 5% interest rates are high.
With elections on the horizon, I am sure that there will be the need to place blame or take credit.
While most have held the Fed up as fools, they are the real reason we are finding inflation dropping.
The right will argue inflation is still raging and the left will boast that the good times are back.
Both cases have some merit.
Inflation is a measure of increasing price pressure.
It is less now, but as we all know, prices are still going up.
We are in the best recession I have ever seen and the equities markets reflect such.
I don’t agree that the federal government has done much of anything to actually help and the long-range implications of spending are yet to be evaluated or paid for anytime soon.
So, with that in mind, what is an investor to do?
It does seem the party is not over, but it has made one heck of a run.
These things never just go up.
It would only seem logical that a pullback has to occur, if only for technical reasons.
The markets however move to their own liking with little to say for logic.
I for one will just be sitting this dance out for a while.
