Tomorrow is my first full day at work after a week off with family; I am slowly easing myself into my regular routine.
There are so many cross-currents that I thought something would happen. “Food for thoughtThe question can help in the process. These are fleshy issues, some of which I hope to address in more detail in the coming weeks
1. In the bear market: Recessions usually have bear markets with them, but not always. The charts in the New York Times above show the history of the two. Our first question: Will this bear bring recession?
2. Inflation: Are We Closer to Inflation? Will the cost of bites on consumers be slow, and therefore the price? Will the world return to inflation soon? Does the FOMC believe that inflation is financially based? Do they think the rate driver?
3. Bond: What is the end of Bond bull market which started in 1982?
4. Recession: Will he suffer from a slowdown in growth in ExxonMobil or will the Fed slow down the economy enough to reduce demand-driven inflation without causing a full contraction, or is a soft landing possible? Is the FOMC plan just enough to slow down the economy, reduce demand and allow supply chains to normalize?
5. Crypto: Does crypto represent systemic risk? Is it an asset class that will spread to the rest of the economy, such as housing / mortgages in the mid-2000s; Or is it like the collapse of a single 3 trillion company …
6. Cyclical vs. secular: Will it be a long and drawn secular beer market, e.g., 1966-82 or 2000-2013? Or would it be a cyclic bear in a secular bull, e.g., 1998, 2010, 2018?
7. Income: Profit growth has been healthy over the past decade; Could it go with a higher (or perhaps much higher) rate?
8. Retail sales: Adjusting for increased supply, but potential demand decreased. How will consumers react to inflation and a general slowdown?
9. Housing: Are enough houses being built to balance demand? How long will he finish the low supply? What does the 6% mortgage rate do toward equity demand?
10. War in Ukraine / Russian aggression: Will this war end anytime soon, or is it just another Afghanistan that will continue year after year? Will it spread to Europe? What does this mean for Russia as a nation?
This is the question I’m asking myself. I don’t know the answer, but I will continue to explore them all …
Before:
Capitulation Playbook (May 19, 2022)
Secular vs. Cyclical Market, 2022 (May 16, 2022)
Panic Selling Quantified (March 24, 2022)
Bull and bear market
Formula:
What happens when the stock market becomes beer
By William P. Davis, Carl Russell and Stephen Gandell
New York Times, June 13, 2022
