Special Market Update – “Market Sentiment = Inflation Stress”

“Sentiment” means an attitude, thought, or judgment prompted by feeling; a refined feeling.

Late last week market sentiment quickly soured, like moving from spring to summer in just a few days; sentiment is very concerned about INFLATION and its influence on the future domestic and global economic path.  It’s not about economic strength – strong consumer spending, or company sales/earnings – it’s all about how the Fed and other global central bankers will be “attacking” stressful inflation.  2022 is the year of rates – inflation and interest rates (the Fed just raised rates another 0.75% – the biggest hike in a single move since 1994).  Inflation is creating demand destruction.  Inflation diverts where consumers would otherwise spend.  That growing concern is causing investors to rethink their attitude toward stocks and bonds.  After approaching these levels in late-May, the stock market officially entered a bear market down -20% on Monday (June 13) following  a short-lived bull market which ran just 22 months (from 3/23/2020 and ending on 1/3/2022).

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Bowling Bumpers – June Commentary

Chloe and Miles grew up between the same bowling bumpers that encouraged risks, inflated confidence, and prevented consequences.”  The quote is from “Rock the Boat” by Beck Dorey-Stein.   Ever bowled where bumpers are placed in the gutters on each side of the lane?  Rolling a gutter ball is not possible.  This makes bowling fun for young kids and new bowlers.  But, this concept is dangerous in real life – putting up “fake” guardrails to prevent bad outcomes; then when the trouble occurs, extending “forgiveness” without consequences.  The same concept can occur in life when we are allowed to enjoy our “kicks.” But when the “bumpers” are removed, unwelcome “kickbacks” can occur.  When my boys were growing up they were cautioned, “You can choose your kicks, but you cannot choose your kickbacks.”

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