The bounceback failed for now.
The S&P 500 moved back below 5600.
I hate trite expressions like crossroads or inflection point, but we have not determined where this market wants to go.
It seems that there is so much to digest on a minute-by-minute basis that no one has a clue where we are headed.
The administration is one day praising Russia and the next threatening sanctions and tariffs.
I have no idea how this will all impact Ukraine.
The administration’s anger is also focused on Iran and Hamas.
I forgot to mention the judiciary that has raised the administration’s ire.
I would be remiss though if I didn’t mention that the preferred inflation measure for the Fed, the
Personal Consumption Expenditures, came in as expected leaving more doubt about a rate cut.
It did not appear to signal any current rise in inflation, but the tariffs have yet to hit.
Did I mention that the so-called “independence day” happens this week with 25% tariffs at a minimum and more possibly to come.
This just seems too big a hill for this market to climb over.
Maybe that is just the “wall of worry” this market needs. I feel however, it might be the beginning of a sell-off that might finally bring some value back to this market.
It seems that the hype over AI has gotten way ahead of itself.
There is no doubt this new technology will change almost everything as we know it.
The timing is debatable.
As I mentioned last week, the fossil fuel industry is far from extinct.
My concern is that far too many investors, particularly young investors, look at this market as akin to gambling.
Far too many investors are leveraged, which works in a rising market, but destroys in a bear market.
The selling can feed off itself far worse than the recent bullish buying.
So much of this market is built on the backs of consumers.
Will they continue to spend their earnings if the mood changes.
All the administration’s plans to bring back industry makes sense to me, but it will take far longer than most realize.
Moreover, will the jobs be there or will they go to robots?
I am sure we will get through whatever the next couple of years brings, but it might take adjustments.
Adjustments are not always comfortable, especially if you are the one having to change.
As they says though, there is always opportunity with every event.
Some of the biggest gains come after losses.
I’m not trying to figure out how this will turn around, but how far we pull back and how long it takes us to recover.
Will we have a V recovery, which happened with the Pandemic or will it be like the dot com bubble that took a decade.
There is money to be made in any case.
You can run with the bull market or find value in a bear market.
This is what makes investing so intriguing.
Moreover, it will teach you discipline and patience or it will run over you.