Good Friday AM,
Data today was super strong. More jobs created, less unemployment. The hourly wages dropped, which is not a good thing (actually pretty bad precursor), but I would have expected rates to have taken a huge hit on today’s news. They did not.
Great and funny (if it were not for being true) piece from Dan Rawitch below.
Bonds are rallying significantly but I hate the reason it is happening. Russia has decided it is a good idea to blow up the largest nuclear power plant in Ukraine. Do they not recall Chernobyl? What is wrong with these idiotic barbarians? As of now, it appears the reactors have not been damaged and things are ok. I will not give you a blow by blow on the war because you do not need to hear it from me. What I will tell you is that the World markets are deeply troubled and trillions are bleeding out of markets all over the World. It is now time to start thinking about the stock market being in a full-on bear market and there is not a thing the Fed can do about it. We have never seen a 50% increase in inflation or a Fed Rate hike cycle NOT pull us into a recession. Now we have both of these things PLUS a war which guarantees a recession. If you study historic time cycles you could have predicted to the day that Russia would invade Ukraine. We are in the midst of a 30, 60, and 90-year cycle. We can trace these cycles back hundreds of years. Just going back 30 years, the USSR cold war ended. 60 years ago we had the Cuban Missile crisis and I could go on. 2022 is a year of multiple war cycles coming together. This data comes from the world’s renowned cycle expert Andrew Pancholi. For years Andrew has helped me navigate the markets by using time cycles. Hedge Funds and Wall Street firms pay him hundreds of thousands of dollars each year. Based on this info the cycle will continue into July and come to some sort of head at that point but we will feel the effects well into 2023. All of this of course equals very low-interest rates. First, we have to let the Fed screw up and raise rates. Next, the yield curve will invert and take us into our recession. Then you will get another refi craze.
From the WSJ: because of Russia’s role in global energy and other commodity markets, “we’re going to see upward pressure on inflation at least for a while,” Federal Reserve Chairman Jerome Powell told the Senate Banking Committee on Thursday.
Equities, as mentioned above, are in bear mode. There will be a lot of volatility over the short and medium term so I would not be trying to time the markets.
Please remain safe and healthy, enjoy the weekend, make today great.
