2022 S&P 500 GAAP EPS estimate falls to $176 and with close of index for year in 3800s trading at 23 times. Previous 12 month high for GAAP EPS was $197 just a few months back.
I make a pit stop, wipe the windshield, check the gas
economy barely growing
Yield curve massively inverted
Layoffs spreading
but stocks roaring - one of the best Januaries in decades.
Vix is rock bottom low 18
Greed and Fear index in greed, nearing extreme greed.
This is not a great setup and feels like temporary short covering to me.
If I knew how, I'd buy some kind of put due around the time of the debt crisis - June, I think? Take 50 bps of the portfolio and buy some cheap insurance. Maybe I'll read up today and see how it's done.
Inflation really isn't cooling anymore in the US...it fell nicely in december but January numbers look pretty stable. Which is not great. The fear is that knocking inflation down to 4% from 8% was pretty easy but getting that last 2% is hard, esp when everyone has a job and is getting raises.
Maybe as the economy treads water overall global capitalism will be able to supply all the stuff we want to buy, at lower prices.
I don't like this setup though - inflation has stopped going down...it's looking to be sticky at 4%. That will not let the Fed stop raising rates.
This rally feels like short covering. I'm still very long, but taking some off the margins.
Despite my bets against the market being the biggest holdings I have in stocks (and them tanking), thanks to Tesla and bitcoin my stocks returned @ 5.9% for the month
I don't like this setup though - inflation has stopped going down...it's looking to be sticky at 4%. That will not let the Fed stop raising rates.
This rally feels like short covering. I'm still very long, but taking some off the margins.
The sticky part of inflation is the energy segment. The excessive spending worked itself through the system. Biden artificially suppressed it with his SPR releases (an unsustainable tactic). He could achieve the same gains (and then some) simply by relaxing his executive order. In lieu of that, the fed will be forced to continue to hike rates to contract the economic demand. So, he has two options: continue to constrain the energy market and force the fed to cut rates to create enough damage to other segments of the economy to draw down overall inflation to their target level, or eliminate the constraints and minimize the impact of rate hikes onto other segments of the economy. It would help if he actually acted in a way that would force a compromise regarding the war in Ukraine as well instead of continuing to feed the beast.
I don't like this setup though - inflation has stopped going down...it's looking to be sticky at 4%. That will not let the Fed stop raising rates.
This rally feels like short covering. I'm still very long, but taking some off the margins.
The sticky part of inflation is the energy segment. The excessive spending worked itself through the system. Biden artificially suppressed it with his SPR releases (an unsustainable tactic). He could achieve the same gains (and then some) simply by relaxing his executive order. In lieu of that, the fed will be forced to continue to hike rates to contract the economic demand. So, he has two options: continue to constrain the energy market and force the fed to cut rates to create enough damage to other segments of the economy to draw down overall inflation to their target level, or eliminate the constraints and minimize the impact of rate hikes onto other segments of the economy. It would help if he actually acted in a way that would force a compromise regarding the war in Ukraine as well instead of continuing to feed the beast.
I heard today that BP is spending half its r/d on green energy. Exxon less...maybe a quarter. The problem is not Biden - the problem is that energy companies don't want to spend many billions to dig up oil (maybe) and have their stock price punished as their returns on equity fall as a result.
But yeah, energy is a problem. The core measures of inflation, which exclude energy, are stable. The headline numbers, that include energy, are rising.
The sticky part of inflation is the energy segment. The excessive spending worked itself through the system. Biden artificially suppressed it with his SPR releases (an unsustainable tactic). He could achieve the same gains (and then some) simply by relaxing his executive order. In lieu of that, the fed will be forced to continue to hike rates to contract the economic demand. So, he has two options: continue to constrain the energy market and force the fed to cut rates to create enough damage to other segments of the economy to draw down overall inflation to their target level, or eliminate the constraints and minimize the impact of rate hikes onto other segments of the economy. It would help if he actually acted in a way that would force a compromise regarding the war in Ukraine as well instead of continuing to feed the beast.
I heard today that BP is spending half its r/d on green energy. Exxon less...maybe a quarter. The problem is not Biden - the problem is that energy companies don't want to spend many billions to dig up oil (maybe) and have their stock price punished as their returns on equity fall as a result.
But yeah, energy is a problem. The core measures of inflation, which exclude energy, are stable. The headline numbers, that include energy, are rising.
and anyway, the part the Fed is most worried about is the stickiness of ever-higher wages pushing up demand.
But right wingers can't admit wages are rising so they will make up stuff about energy because that makes them feel better.
I heard today that BP is spending half its r/d on green energy. Exxon less...maybe a quarter. The problem is not Biden - the problem is that energy companies don't want to spend many billions to dig up oil (maybe) and have their stock price punished as their returns on equity fall as a result.
But yeah, energy is a problem. The core measures of inflation, which exclude energy, are stable. The headline numbers, that include energy, are rising.
and anyway, the part the Fed is most worried about is the stickiness of ever-higher wages pushing up demand.
But right wingers can't admit wages are rising so they will make up stuff about energy because that makes them feel better.
Investor class Right and Left Wingers will not criticize the 2017 Republican corporate tax cut that took rates from 35% to 21%. No trickle down to the wage earners, but plenty of stock buybacks to inflate the bloated toad of a market.