Economics:
- Internal - It appears inflation is proving to be ‘sticky’ than expected by my standards and that of many of the pundits on the financial news. Although inflation, increasing rates, and underwheling reported earnings, the stock market had proven resilient. January was unexpected, and although overbought, February there was minor retrenchment - approximately a -5% decline. I thought -10% or more was going to be given back.
Moreover, around this time, I also thought there would be more clarity on China’s reopening and the impact it will have here locally. I must admit this was a rookie mistake, but I didn’t consider that the Chinese consumer is strong this year with their stack of cash in their savings account. They have nearly 1.2T of their own.
- External - what I just mentioned about China is the fact their consumer has a ton of cash and the ECB's recent inflation numbers. I don’t see how the EU doesn’t make a policy mistake and slip into recession. Raising rates will undoubtedly be on the table for some time for them, and knowing when to stop is too uncertain to give any honest conclusion about what to expect out of that side of the world.
Markets:
- Equity - I’m still keeping my original forecast in my 2023 Predictions Article. However, I’m wearing some doubts on my shoulders about where we end. Previously, I mentioned the market will crest 4300. I’m putting this back on the table again because inflation seems to be more stubborn in the US. The idea is that if the market gets another result with a similar tone as we did today, the market will gyrate, and another one after that, the market is really not going to like it.
- Debt: Appealing. I don’t see any problem taking some gains from a fading stock idea and allocating some there. Everything below the two is above the 4% line. Thats exciting. Money markets at some banks are competing for cash. If you are not getting that, just go next door, or down the street. All banks are next to each other.
Firm Updates:
- Mechfi is currently in the due diligence phase of bringing Hoop-It-Up to Sacramento. Currently, it appears to bring 50k to bring the event and accomplish all items on my list that I would like to conduct the event.