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). Expect more volatility as bearish and bullish days are ahead.
THE ECONOMY … While Mr. Market is worried about Covid-Omicron, it’s economic growth projections that are driving the market. Monday’s trading was convincing that the rally would resume after Friday’s big selloff, but who knew that Fed Chairman Powell would pull a surprise on everyone. Today, he told Congress that the Fed may have to speed-up its tapering program (finally admitting that inflation is not transitory). The markets reacted by sending the major averages down almost immediately.
As I’ve said before, we must adjust our expectations to lower gains ahead from slower economic growth and rising rates. There will be bearish days and bullish days. If year-end earnings reports are strong, especially compared to the 3rd quarter, Mr. Market will have much more confidence to advance. Until then, we may be in a volatile period of up-and-down, wait-and-see, or in different words, wait-for-proof. There general market stagnation appears to be awaiting for a bullish 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.