We have made four higher closes for the S&P 500 over the last five weeks and along with that came record high levels.
You would think it would be time to celebrate, but no.
We had a much weaker than expected jobs report with only 22,000 new jobs added in August.
That sent analysts to spinning all sorts of opinions about stagflation and a series of necessary rate cuts.
For many the cuts need to be bigger and faster.
There has been a long-held belief that the rate has been at least 1% too high for a significant period of time.
I’m not sure a rate cut will actually juice the economy, but it will help servicing our enormous public debt.
For home builders, it is like the pot of gold at the end of the rainbow.
I’m concerned that we have priced housing out of the reach of
all, but the rich and lower-interest rates will not help that much.
Of interest last week was the report of surging EV sales.
Don’t be misled, buyers are not trying to save the planet, they are taking advantage of the expiring $75,00 tax break. While there is truth in that, the real motivator is the low-leasing cost.
A vast majority of those new sales were leases.
This summer, I actually looked into purchasing a Tesla, just due to the ridiculously low monthly lease cost.
I don’t really need another car but it did get my attention.
Other EV makers have matched Tesla and you can get a car for nearly $200 a month.
That makes sense to lease for a three-year lease with low mileage needs.
This is why it is important to look beyond the headlines to get the real story.
I would be remiss if not mentioning gold when talking about record highs. We have moved up to $3,600.
I gave up buying gold eagles years ago when they moved above $400. I have then in a safe deposit box and wish I had bought more, but not sure what I would do with them.
Probably going to my grandkids and they will just liquidate and spend to support the economy.
My little contribution to help this country along.
Not planning on exiting any time soon so their purchases may come for their children assuming we have families in the future.
One never knows and assuming is a quick way to find out you are wrong.
Given that September is not one of the greatest months for equities, we have plenty to build a “Wall of Worry”.
You have the growing alliance of China, Russia North Korea and Iran.
We now see India working with Russia for oil.
Russia is discounting the price of crude by $7 to make the sale. Not sure the US has any leverage to stop this transaction.
With the legal challenges to tariffs now forced on the court system, there is the possibility of having to refund all that was collected.
If that happens, there will be little or nothing to reduce the debt.
Let’s say you don’t have to look far to find something to worry about.
It would not take much to put this market in reverse but I would be sincerely surprised if it happens.
We probably need a bit of a correction, but dip buyers have come out of the wood works each and every time to bring the market back bigger and better.
At this point, outside of my trading account, I am just an observer.
I will admit to trimming some positions.
They are not loses, but if you aren’t running with the big dogs then stay on the porch, as one of my good friends is want to say.
In essence, if you are not keeping up you get cut.
Sort of an analogy for this time of the year.