by Robert Holman | The Defensive Advisor | www.defensiveadvisor.com
EQUITY MARKETS RATING … Staying at 7 (where 0 - 4 is bearish, 5 is neutral, 6 - 10 is bullish).
THE ECONOMY … The Fed is tapering, the 10-year rate is rising, and Covid-Delta is still worrisome. Supply shortages and Covid-Delta contributed to slower economic growth in the 3rd quarter. But Mr. Market is trying to look ahead – bears are having their days, but bulls are still forcing prices back up.
It may be the case that current price slippage is in-part due to profit-taking by the wealthiest investors, to avoid higher tax rates in 2022-24 (can’t see past the presidential election in 2024) from the newly passed Federal legislation.
There are many, many worries out there in investor-land, enough to cause momentum swings between bears and bulls. As I’ve said before, we must adjust our expectations to lower gains ahead from slower economic growth and rising rates. If year-end earnings reports are as strong as I think they might be, especially compared to the 3rd quarter, Mr. Market will have much more confidence moving forward. This may be a period of wait-and-see, or in different words, wait-for-proof.
Enjoy the holiday period - I’m here watching developments. Please observe that down days are still being offset by up days. There is widespread stagnation awaiting a resolution.
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Opinions voiced in this post are for general information only and are not intended to provide specific advice to or recommendations for any individual, without complete knowledge of that individual’s total financial profile. No strategy assures success or protects against loss. Past performance does not guarantee future results.