Who will BELL the cat?
US markets were volatile yet again last night. Good that Dow, S&P ended almost flat, NASDAQ was hit due to Tesla. Everyone seems to be in wait and watch approach – classic “who will bell the cat” situation.
Everyone in the US markets is certain that the recession is coming from Blankfein to Bernanke to even Musk. (What is recession: 2 consecutive quarter of economic decline or GDP fall is called recession). Do you remember US GDP declined 1.4% last quarter already – but no one cared so much.
It seems more useful to distinguish between demand-driven Vs supply driven recessions. Last recessions were due to household balance sheet broken, low inflation, no demand and low growth. This time it is due to supply side – where inflation remains elevated, growths slows while the Fed is in no position to slash interest rates that'd stimulate demand and worsen inflation. This is also what’s commonly known as “stagflation”. Or am I missing anything?
We will maintain very disciplined focus on the portfolio allocation & get out of all weaker stocks. We will NOT be adventurous at all.
Still hanging in air:
• Coup on Putin
• Sweden, Finland application to join NATO
• Any tariff reduction on Chinese exports to US
Submitted May 17, 2022 at 02:35AM by beeniam https://ift.tt/5UInQmF
