I’ll be away next weekend, so I will send-out an abbreviated edition of “The Weekly Top 10” on Thursday evening. Thank you very much.
THE WEEKLY TOP 10
Table of Contents:
1) When inflation is induced by a lack of supply (rather than stronger demand), it’s not good for asset prices.
2) The complacency in the U.S. markets surrounding Evergande (& China in general) is astonishing.
3) China is clamping down on “risk taking”…other powers are considering the same thing.
4) The 50-DMA on the S&P 500 is more than just a key support level for technicians in today’s market.
5) Sentiment is not anywhere near as bullish as it usually is at important tops in the stock market.
6) Natural gas has become extremely overbought, so don’t chase it (or natural gas-related stocks).
7) The XLI (industrial ETF) has been a key leading indicator for the economy…& it’s now testing key support.
8) After a quick dip, the U.S. 10-year yield is already retesting its key resistance level!
9) Washington DC is still clueless about what Americans are feeling & thinking today.
10) Summary of our current stance.
1) During the first quarter of the year, some experts started to say that the supply chain problems would persist into the first half of 2022. That has now become the base-case scenario for everybody…with more and more pundits expecting it to be a problem throughout ALL of next year. In our minds, this means that inflation will not be very transitory at all…and given that supply-induced inflation is MUCH different than demand-induced inflation, these problems will likely cause complications for economic growth and create headwinds for the stock market going forward.
As we moved towards the end of the first quarter this year, we started hearing some alarming comments from ...