We had an impressive rally this year, so far. But then the markets stalled on all sorts of old fears – inflation, interest rates, higher for longer, and so on. We lost over 5% in September and October isn’t looking any better.
We are in a recovery mode for sure. Naysayers will keep posting their rants about recession but that is not coming (at least not yet). It will eventually come but not this year and most likely not the next year either (it may come at the end of the next year, but I do not see any fundamental reasons for it). Recession is when people lose jobs, companies stop hiring and their earnings dwindle. But the labor market is strong (which brings fears of pricing pressure and high interest rates) and earnings are holding well and rising again (just look at the most recent Pepsi’s earnings). There are no signs of a recession at all. At least not yet.
The market futures went up in expectations of a PPI report which came in hotter than expected and the last three days strong rally dwindled again. Wednesday’s trading will be weak and we may even close down. But the rally will continue.
Leave a Reply