Market overview: About That Soft Landing
While there are holidays today, I wanted to present you with a preview of tomorrow‘s extensive analysis – as regards stocks and the conomy:
(…) S&P 500 recovered from the intraday reversal to the downside, thanks to tech. Value‘s poor showing can be chalked down to the riskier junk bonds losing early gains, meaning the daily stock market move didn‘t surprise much when bonds closing values are considered. What‘s though flying under the radar, is the turn in Treasury yields – a couple of days after FOMC, bonds are having second thoughs, and aren‘t pushing the Fed to raise too steeply. Anyway, I wouldn‘t be surprised to see 75bp hike in July, to be continued with a few more 50bp hikes then. Coupled with the balance sheet that‘s about to shrink, that would finally start denting inflation – at the cost of real economy growth.
I say growth while I was looking for a Q1 GDP print to come in negative, and Q2 GDP would turn lackluster as well. Still, a full-fledged recession in the usual sense of the word (the consequences), won‘t hit until very late 2022 even though NBER might declare one (based also on unrelenting inflation data) earlier. All the typical signs are in – we had yield curve inversion, oil prices doubled in a relatively short amount of time, and inflation is entrenched above 5%. Whatever the Fed does – and it‘ll do a lot – inflation in essentials won‘t be dented all that much. There‘s no dodging the bullet in my view, and the markets would gradually go from living the soft landing fantasy to readjusting to the hard landing reality to come.
On Tuesday, I‘ll cover the ways to play it – which assets are to remain under pressure and which would still rise. So far, this is the model $50K portfolio measuring my market calls‘ efficiency (closed trades, no fees, no taxes).
Weekend trading continues in cryptos, and the charts (courtesy of Stockcharts.com) are now offering more than a glimmer of short-term hope.
Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
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All essays, research and information represent analyses and opinions of Monica Kingsley that are based on available and latest data. Despite careful research and best efforts, it may prove wrong and be subject to change with or without notice. Monica Kingsley does not guarantee the accuracy or thoroughness of the data or information reported. Her content serves educational purposes and should not be relied upon as advice or construed as providing recommendations of any kind. Futures, stocks and options are financial instruments not suitable for every investor. Please be advised that you invest at your own risk. Monica Kingsley is not a Registered Securities Advisor. By reading her writings, you agree that she will not be held responsible or liable for any decisions you make. Investing, trading and speculating in financial markets may involve high risk of loss. Monica Kingsley may have a short or long position in any securities, including those mentioned in her writings, and may make additional purchases and/or sales of those securities without notice.
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