Zoom Out and focus on the current and not the ripples on top of the river.

The Ripples: how the press/media and generally how most retail investors think and talk about the markets and the economy.

  • Regional Banks have been destroyed or have required an emergency room infusion to survive. Silicon Valley, Silvergate Capital, Signature, First Republic.
  • Massive Global Swiss bank imploded. Credit Suisse.
  • Debt Ceiling limit is once again terrifying US Citizens and shows how Washington DC is a bad magic show. Of course, you’ll pull out the rabbit, in fact we can see the rabbit. But you keep telling us there is no rabbit anywhere near the stage. No rabbit = No magic show. No debt ceiling increase = No Washington DC.  Yet we get sucked into the magic trick.
  • People will lose jobs and we are heading into a recession.

The Current: the more important direction of economic and market facts to understand.

  • Inflation is falling, and likely faster than the FED (Federal Reserve) wants to admit. June ’22 high for CPI 9.1%. April ’23 4.9%. Lower numbers are better for markets and economy.
  • US has had 29 straight months of jobs growth. Even in a jobs growth environment, people lose jobs, but in aggregate employers are demanding workers, how can this be bad? Especially when one of the FED mandates is “full employment.”  Counter argument, more workers mean more earnings means more income and thus more spending by consumers and this adds to inflation.  Interesting…. see my first point in this section.
    • Even further below the current to the riverbed. My feeling is that all the excess liquidity that was handed out to citizens during covid has finally been burned off and low and behold, people got off the couch and returned to workforce.
  • Debt Ceiling vote passed House & Senate and it’s on the Presidents desk. Guess how this magic trick turns out.
  • The technical definition of a recession was met in 2022, yet the entity that calls it a recession didn’t call it that. Clearly, it’s not like the freezing temperature of water.  A recession might happen, or it might not.  So, it’s sort of like the referee of a soccer match who lets the game continue even though the clock says the game is over.
  • Year To Date
    • S&P 500 + 10.61%
    • NASDAQ +25.62%
    • DJIA +0.87%
    • Bloomberg US Aggregate Bond Index +3.8%

Follow the current, not the ripples.

Past performance is not indicative of future results. Indices mentioned are unmanaged and cannot be invested into directly. The S&P 500 Index, or Standard & Poor’s 500 Index, is a market-capitalization-weighted index of 500 leading publicly traded companies in the U.S. The Nasdaq 100 Index is a basket of the 100 largest, most actively traded U.S. companies listed on the Nasdaq stock exchange. The index includes companies from various industries except for the financial industry, like commercial and investment banks. The Dow Jones Industrial Average is a price-weighted average of 30 blue-chip stocks that are generally the leaders in their industry. The Bloomberg U.S. Aggregate Bond Index is an unmanaged index comprised of U.S. Investment grade, fixed rate bond market securities, including government agency, corporate and mortgage-backed securities.