Quote of the Week
“I’ve learned that ‘making a living’ is not the same thing as ‘making a life.’ – Maya Angelou
Last week was a good week for the equity markets. The S&P 500 was up +3.97%, the Dow was up +5.72%, and the Nasdaq was up +2.25%. Year to date the S&P 500 is down -17.10%, the Dow is down -8.06%, and the Nasdaq is down -28.57%. It is clear that the high growth high flyers of 2021 are now out of favor based on the Nasdaq performance year to date. Based on the data coming in I expect the equity markets to continue to decline for at least the next two quarters as we remain in Quad IV.
The big news which has yet to happen will come out of the Fed meeting on Wednesday and Thursday of this week. The expectation is for a 0.75% rate increase already baked in. The key is what the Fed is going to say their intent is going forward as to future rate increases. If the Fed continues to raise rates into next year the equity markets should continue to decline another 10% to 20%. If they raise rates into next year and keep rates high for an extended period of time we could see an additional 10% to 20% decline.
Currently we are 92% in cash. Nothing looks attractive at this time. I expect the next positions were will take will be in the bond markets as the Fed kills the economy and long term interest rates begin to fall.
On top of all that, the latest bad news is that there is a shortage of turkeys this year.
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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.
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