Because I received surprisingly good feedback on last week's blog, I am going to push my luck with this one.
* The surprisingly strong employment report for January which indicated a gain of 517k in nonfarm payrolls and was confirmed by an 894K gain in household employment. Further there were cumulative upward revisions to the payroll survey of 813k jobs. The ebullience in the job market sent the unemployment rate down to a cyclical low of 3.4%. All of this means that the Fed Funds rate will be higher for longer and those looking for a pivot in 2023 are in for a disappointment.
* Even after Friday's interruption, NASDAQ is up an astounding 14.7% YTD. To me this means the excesses of the pandemic bubble have yet to be purged from the market.
*The Chinese spy balloon incident and news that Iran is building a drone factory in Russia makes it less likely there will be any cuts in defense spending. Indeed there will likely be an increase above current planning.
* The biggest geopolitical event thus far this year has been the unusually warm weather in Europe rendering Russia's energy weapon mute, thereby strengthening European solidarity in support of Ukraine.
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