“My contention is that prior to the Revolutionary War, the economic modalities—especially in the southern colonies—could most aptly be characterized as agrarian pre-capital—”
Why is this market trending up during a Fed hiking cycle? It makes no sense to me. Company earnings in the S&P 500 are reportedly struggling, and the market seems to be disregarding core CPI while focusing on headline CPI. Is inflation truly decreasing? Are your monthly expenses decreasing? How could tech companies rebound so quickly from 2022 lows? I thought the Fed wanted to slow down the market. The unemployment data signals strong wages, which theoretically should increase cost inflation. Additionally, real rates are increasing, which may push down equities from a valuation perspective. What are your thoughts?
In addition, the 2s and 10s and 3mo and 10s are indicating recession based on length and depth.
Wouldn’t that be deflation rather than reduced inflation?
How would the stock market be on a tear if deflation affects earnings? Are they anticipating the Fed to lower rates and create another bubble, with tech stocks leading the way? Just trying to wrap my head around the SPY being in bull market territory.
Ps. On a personal note, has anyone seen prices deflate, except perhaps at the pump - slightly.
Pss. We could have both. Decrease inflation and deflation.
Ai, high consumer spending, strong construction sector particularly around warehouses
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As a side note it looks like q1 consumer spending was up a real 4.3%, or 8.3% nominal. But q2 was only up 1.0% with nominal less than 4.0%. Unemployment continues to go up on a 4 week moving average basis. Savings are depleting causing spending to decrease and student loan repayments starting up again should slow economic gains. You can watch credit spreads and claims and consumer confidence in the coming months to see whether a recession will still happen in the later part of the year.
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Great article! Thanks for sharing. I guess my hopes of the SPY reverting back to 2022 lows are pretty slim.
Eh, it may. I’ve been dollar cost averaging in over this year rather than going all in at the beginning because I bet there would be a recession in the second half. Its just taking longer to materialize than I thought. There are good odds that it still will happen, but not until Q4.
Maybe not that small of a chance of a recession later this year after all.
Cool little article. See below.
“With both global and US stocks more than 20% above their October 2022 lows and a more challenging second-half outlook, we believe investors should position for more lackluster stock market performance through the remainder of the year,” Solita Marcelli, chief investment officer Americas at UBS Global Wealth Management, said.
https://www.bloomberg.com/news/articles/2023-07-02/asian-shares-set-to-rise-on-the-back-of-us-rally-markets-wrap
just follow price and breadth data stop reading junk
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Fellas! The move is pretty obvious right?
- Short term rates are at 5%
- Stocks are 5% below the peak.
- Inverted yield curve predicts recession
It’s a no brainer. Buy short term bonds.
Also quick update my call option of 7k for spy contract is now 12k.
I bought when market was down 20%. It’s up 60%ish.
I was invested in sivb and lost 14k though 
I’ve been unemployed for a few months. It’s fun.
My networth still went up to 710k from 640k.
Im out of the etf holdings. I own 40 securities.
I’m up 25% vs 19% for spy.
Currently a 3.9 gpa at Usc mba.
I also have 45k followers.
I was in London, and can still pull baddies.
I did not cheat on my wife so still married.
I’ve been running 3 miles a day, but can’t seem to lose weight.
It sucks getting old, but at least I’m richer.
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One reason for continued stock performance that hasn’t been mentioned yet: more retail investors are favoring higher percentages of stocks in retirement funds. I think it was a WSJ article, but I can’t find it now… Anyway, the reporter interviewed several retirement-aged people whom you would think would be more risk averse. To the contrary, they recognized recent underperformance of bonds and therefore ranged their retirement funds 80-100% stocks. Of course the percentage likely doesn’t include alternatives such as real estate or bullion, which were not discussed.
As for taking advantage of current markets… eh, I guess there’s still some potential for shorting small banks. Or buying them in hopes of a buyout.
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