Special Market Alerts are generally undesirable to write. That’s because we never intend to raise alarm or create uncertainty. How should investors think about the first 10% correction of this new bull market? Certainly a correction was due following 23 months since the March 23, 2020 bear market bottom. From that time, the S&P500 jumped +121.1% to its last closing high on January 3, 2022 without even a 5% pullback. Since early January, investors ramped-up their worry about everything – sticky inflation at +7.6% (highest pace in 40 years); persistent supply and demand mismatches for products, services, and workers, creating shortages. When demand is greater than supply, prices will rise. In fact, someone said “Inflation is an economic problem, and also a psychological proxy for things being out of control.”
Monthly Archives: February 2022
There’s Plenty More – February Commentary
We occasionally hear this idiom: “There is more where that came from.” It can be used in a negative, combative sense or in a positive, generous way. The statement may be offered to a belligerent child – “if you do not shape up, there’s more to come.” Alternatively, where there is strong achievement more success often follows. In both cases the meaning is the same: there is a reservoir just waiting to be tapped if needed. Another famous statement: “the barrel is only half full; or the glass is half empty.” As we pass through 2022, will there be more market advance (from which it came), or are investors expecting the success to evaporate? Is the longer market up-trend still viable, or are the short term worries about “everything” (inflation, interest rates, Russia/China/North Korea, oil, COVID variants and living life again) emptying investor sentiment? How much more is to come – plenty more (of what)?!