Quote of the Week
“There is a grace of kind listening, as well as a grace of kind speaking.”
– Frederick Wiiliam Faber
If you missed last week’s letter there was a reason. I had a horrible cold (not COVID, I tested). Nothing much changed. We are still in Quad IV and going deeper.
Last week the Dow was flat, the S&P 500 was down -0.7%, and the Nasdaq was down -1.6%
These economic signals are now worse than the Quad IV signals of the 1980-1981 recession. Check your memory bank for that one.
The outlook is one of the most ominous in my entire career. With no positive turn in the longer leading indicators yet, a bottom for growth in unlikely until quarter 2 of next year at the earliest. The depth and the breadth of these indicators collapse is now of historical scale. While every cycle is different and no process is fool proof, we get confirmation from the depth of the lead indicators and how pronounced, how pervasive, and how persistent the global and domestic the downturn cycle may be.
Further, in this case we have a litany of potential negative catalysts into the global recessionary backdrop, including: a global energy crisis, central bank panic with tightening into a recession, and a structural growth collapse in China amidst a Zero COVID Policy. You can top that off domestically with the Fed continuing to raise interest rates and the consumer going into hiding soon. The top quartile of consumers in the United States has already cut back spending by 30%.
To make matters worse the cost of a Thanksgiving dinner has risen by over $10 dollars.
I’m doing the dinner again this year and if you would like my recipe for roasting the turkey let me know.
I truly hope everyone has a wonderful Thanksgiving.
If you have friends or family in need of financial life planning services,
It would be the honor of Laurence Lof Financial Advisors to assist them.
We value your referrals!
Follow us on Facebook: https://www.facebook.com/LaurenceLof/
These are Larry Lof’s opinions and not necessarily those of Cambridge, are for informational purposes only and should not be construed or acted upon as individualized investment advice. Past performance is not indicative of future results. Due to our compliance review process, delayed dissemination of this commentary occurs.
The S&P 500 index of stocks compiled by Standard & Poor’s, a division of The McGraw-Hill Companies, Inc. The Index includes a representative sample of 500 leading companies in leading industries of the U.S. economy. Indices mentioned are unmanaged and cannot be invested into directly.
Technical analysis represents an observation of past performance and trend, and past performance and trend are no guarantee of future performance, price, or trend. The price movements within capital markets cannot be guaranteed and always remain uncertain. The allocation discussed herein is not designed based on the individual needs of any one specific client or investor. In other words, it is not a customized strategy designed on the specific financial circumstances of the client. Please consult an advisor to discuss your individual situation before making any investments decision. Investing in securities involves risk of loss. Further, depending on the different types of investments, there may be varying degrees of risk including loss of original principal.