My website’s market commentary on 30 June could be described as a mini-report and my Interim Update on 1 July is simply posting charts that were backing up in my folder and I did not have the time to fully comment on.
Here is one chart I posted in my commentary. Everyone is guessing on where the bottom will come in. It really depends on when the Federal Reserve finally panics. But they will not panic over the stock market, they will only panic over the credit markets. And they have added tools to keep it from seizing for the same reasons it seized in 2020.
The Buy & Hope crowd will discover very late that Super Bubbles do not bounce back to new highs anytime soon. I will not add much more commentary on the chart here. But you may get my drift.
I will add that wealth is not a price or retirement fund balance. It is determined by the future flow of income to you in the future. And sorry but banking on higher stock prices in the future is not how we calculate wealth. One can use dividends or interest payments or even spending down your balance sheet. But not the dollar value today of your account in stocks because it could be gone by next month or year.
After 40 years of low inflation and 13 years of a central bank driven bull market, investors have no idea what is coming. None. Even most analyst missed or do not understand the last inflationary period in US history. It was not pretty.
I’ve been looking at 1960 and 70 charts on inflation and Fed policy. They blew it.
Fed Governor Bullard has been studying it too. He kept his message simple. The Fed HAS to attack inflation HARD today and raise rates above inflation or they will lose control. He of course hopes inflation will come down as interest rates rise so they do not have to go too far.
The recession started many months ago, but the media has to be hit over the head with a 2 by 4 of backwards looking data to report it. Some in the market think surely this means the Fed will slow down. I doubt it, but I do see the market rates pulling back for now as money flows into safer investments.
My approach is always big to small. The big includes the drivers of the stock market over the cycle. The small includes seasonal analysis and technical analysis.
Members can read my 30 June market commentary. There will be a lot more coming over the summer. It is going to be an interesting summer.
Invest Smart,
Michael Bond
Categories: Perspectives, TSP Charts