I’m writing this on my phone as my wife takes over driving from Nashville back to NJ so many numbers are ~about~. This was a January rally that I was not expecting. Although the Markets may have been a bit oversold coming out of 2022, nothing of significance has changed.
Yes, inflation is starting to move in the right direction but we are minor inconvenience away from heading back the other direction.
It seems the Market is already pricing in cuts late this year/first half of next year which I don’t agree with. I do feel the fed will be forced to stay with a higher for longer like they have been saying, but I don’t think markets are taking those impacts with earnest.
I was also expecting, Fed Chair Powell to be a bit more aggressive in his stance in this past weeks FOMC meeting. Instead he touted about disinflation, and instead of slowing rate hikes he mentioned they would essentially hike as needed.
In the state of this Bull deprived market, that was just the catalyst needed to launch the S&P from ~4,050 to a high of ~4,184 on Thursday.
I am not convinced this is the middle of a bull run, but lean more toward it being the last breath of one. Now I am not saying I am short the market, but I have no intention of adding to positions here. Could it be a shake up of short positions? And if people are still trading “jpegs of monkeys” the next meeting will have a different tone? Could this be JPOW seeing if the markets can regulate themselves temporarily or if earnings will be able to limit the market bulls aggressiveness to a speedy economic recovery.
The other piece of news that was surprising this week was the jobs report adding 517,000 new jobs to an expected ~180,000. I have not been able to put my finger on this as to why there was such a big miss in expectations. My first thought is workers are going back to blue collar / service industry jobs as tech / support roles are laying people off. I have nothing to confirm this, but there is definitely a shift in workforce sentiment.
I currently hold EWW and EWZ. I’ll get into why another day, but overall outflows to other countries markets has helped some of these rally the last 2-3 months. GLD as a gold index fund only because I don’t want to short the dollar but I do see it as a way to hedge against the dollars devaluation. TLT as a way to have some exposure to the bond market. OXY as a way to hold any potential catalyst in oil markets such as China reopening or the US gov’t having to rebuild strategic petroleum reserves. I also dabble in the radioactive. You guessed it Uranium. I do feel a lot of countries had some early abandonment of their nuclear power plants, and I believe these countries will regret this decision and re-open these plants. This is a long play as it does take time to build and reactivate plants but it is our cleanest fuel in regards to greenhouse gases.
With all this said, I am staying the course with the hand that I have currently. I will stay flexible and adapt as needed, and while I did miss out on some of the rally so far, I think I will have another opportunity to enter later down the road.
Diary of a Retail Trader 