A Lot of Hyperventilating…
It seems like now is the time for market players to get rational. Since the market tested the June lows on October 14 a lot has happened. The waiting over the FED’s action is over. More importantly the market moved a lot of money out of consumer tech (the Fangs) and now we see sectors that are part of the New Green Deal come alive. Biotech and Solar, two key sectors in this area have been really moving. EV which is also a part of the picture has lagged during this period, but probably much of that is due to Musk’s behavior.
Here is our sorted sector ratings for two key intervals versus today, first, the top on inflation on June 6, 2022 and secondly, the bottom test on October 14, 2022. It is interesting that over the past couple of weeks while the FED action was awaited, the top five sectors were Travel & Entertainment, Bitcoin, Agriculture, Banks, and Solar, while 10 yr bonds, Gold, EV, 20 yr bonds, and Fangs sucked to the bottom.
We have been talking for some time that the green areas are where our focus is being maintained.
- Over the weekend we will put out our updated review of the relation of the FED BALANCE SHEET and total market pricing as well as GDP. It is interesting to see that the Balance sheet, while having declined some from its extremes, is still in the stratosphere. To me this is what to watch as the economy starts showing the effects of grass roots employment strength.