Markets have a habit of getting over-excited. They get FOMO and become over hasty. Although the outlook is improving, there is certainly little to justify some of the more speculative hype dominating market moves. Time a bit of rational thinking and common sense – consider Tesla as an example of misplaced hopes.
Delighted to hand this morning’s Porridge to my colleague Julian Wheeler, who reminds us not to fight the Fed, making the argument against deep recession and for stock market upside. Markets are about differing views and perspectives – and despite my latent bearishness, I find myself in agreement with much of what Julian says.
Watch the Bond Markets. In bonds there is truth. Brutal, uncompromising, painful truth. When the crisis comes, it will hit bond markets first.
Markets are just enormous voting machines calculating the opinion of every participant, therefore no single “idiot” can drive them.. but they can certainly influence how the other participants vote.
Last week saw a succession of fundamental shifts in how the global economy is working: inflation, China’s reopening, western politics, crypto, Climate Change, Tech stocks, and in Ukraine. These all have significant potential market implications.
“Leverage, Liquidity and Volatility upturn markets, triggered by policy mistakes, ignorance, hubris or plain getting it wrong. These are dangerous times as multiple issues threaten confusion – so some simple market mantras might help!”
Chips are a critical component of global supply chains – there are significant geopolitical risks inherent in the concentration of semi-conductor production in Taiwan. However, an even bigger geopolitical risk may have been triggered by the FBI raiding Trump’s lair in Mar-a-Lago.
The world is watching for signs confirming global recession, so naturally markets have rallied (!). Political instability is resolved to be replaced with some bleak truths and spending choices. So.. steady at the wheel, nothing to worry about then?
Boris in his bunker is a great example of delusion. Eventually those who do not know themselves get sniffed out. Its happening in markets - speculation is dead. Common sense is back.
Did you feel the Earth shake and judder? When dull, boring, predictable retail giants crash 25% intra-day, time to take notice. Boom/Bust is back – and this time its serious. Anyone for the last few choc-ice?
