Stocks rose last week due to oversold conditions being reversed and Ukraine making progress in its war against Russia.
www.ft.com/content/e9b7245c-7e5a-46d0-9097-c4276136fb21
While it is perhaps too early to declare the all clear on the war,
twitter.com/RobinBrooksIIF/status/1569252284047020035
many traders have turned optimistic about near-term market action. Among the reasons cited are that
1) headline inflation is falling,
2) bond yields may have topped out,
3) the war in Ukraine may end in the next six months,
4) the European recession may not prove as bad as feared thanks to fiscal support,
5) investors are pessimistic,
6) the $SPX500 found technical support at 3900,
7) the Fedโs hawkishness is already well-known,
8) it is difficult to come up with reasons that would make investors to sell.
Thus, the market should continue to frustrate bears.
We have sympathy for this view in the near term, but remain cautious about the next 12 months because the valuation of the market is unattractive, the inflation problem is not solved, and economic momentum remains negative.
It could well be, though, that we will have to wait until 2023 for the next major down leg to occur, as it is only then that the Fedโs interest rate hikes will weaken the economy sufficiently to raise the unemployment rate. For now, everybody has a job and they are happy to speculate, which makes it difficult for the market to fall too much.
๐ฎ๐ฌ๐ฎ๐ฎ ๐ฝ๐ฒ๐ฟ๐ณ๐ผ๐ฟ๐บ๐ฎ๐ป๐ฐ๐ฒ ๐ฌ๐ง๐
@triangulacapital -5.5%
$SWDA.L -15.9%
๐ฃ๐ผ๐ฟ๐๐ณ๐ผ๐น๐ถ๐ผ ๐ฐ๐ต๐ฎ๐ป๐ด๐ฒ๐ None.