by Robert Holman | The Defensive Advisor | www.defensiveadvisor.com
EQUITY MARKET RATING … 4.0 (0-4 bearish, 5.0 neutral, 6-10 bullish) … At this point, no change, still bearish. Last week’s rally turned down; what looked and felt so good was just a typical bear trap. Are we seeing a repeat this week?
EQUITY MARKET and the ECONOMY … The market is moving up today on unverified news that Putin has withdrawn 10K troops from the Ukrainian border. To me, that is a non-event. My guess is that this showdown will end when Putin gets what he wants from a US that cannot afford war.
Inflation is running very hot, with monthly increases near 10%. We had a near inversion of the yield curve last week before subsequent bond trading straightened things out. (Note: the yield curve inverts when the Fed forcefully restrains the economy from experiencing run-away inflation, and restrains it so forcefully that a recession typically starts (which cools things down)). We now have a rising yield curve, but it has flattened compared with several months ago.
Oil and energy stocks seem to move up and down with every supposed change in status of the Russia-Ukraine situation. The Administration’s banning of horizontal fracking has severely restrained supply, and as a result, prices are going to be on a long-term uptrend. The effects of rising gasoline costs will continue to contribute to inflation.
Monthly inflation will appear to subside, merely because comparisons will be against past months with elevated price indexes. So, the numbers will look better, but prices will still be marching upward. My guess is the market will react favorably to the apparent slowdown; since it seems to be looking for any excuse to continue the bull rally.
PORTFOLIOS … Position your portfolios consistent with these upcoming trends. Just click here, and I’ll be happy to give you a complimentary portfolio evaluation – sending you an email explaining what’s good, how it’s likely to perform, and giving you a couple of ideas for improvement, all at no cost to you. Alternatively, you may contact me by email at email@example.com, or by calling 972-702-6032, and I’ll also give you two stocks we own in our portfolios and two stocks nearing Buy status.
TO MY CLIENTS … THANK YOU FOR YOUR TRUST. We’ve had remarkable success since we started this RIA in mid-2018, ahead of the market return over the same time.
Excelsior Divitiae. 1Chronicles 12:32, Ecclesiastes 8:7, James 4:13-14, 1Chronicles 29:11-12, Proverbs 21:5, Joshua 1:9, Proverbs 22:3 and 27:12, and Proverbs 3:5-6.
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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.