Skip to main content

Notes for Investors: What Markets Indicated This Week

  • The bond market created fear this week when interest rates on the 10-Year Treasury Bond unexpectedly dropped.
  • The bond market has historically been a fairly accurate predictor of where the stock market is headed. When bond rates decrease, it’s often a sign of recessionary times ahead.
  • I believe investors were frightened by the bond market’s activity, and this caused a sell-off in the market.
  • But is the bond market telling us we're headed toward Bear Market conditions?
  • No, I think this all boils down to the ongoing unemployment issue—specifically, the labor participation rate.
  • Jobs are there, but they aren't being filled because many unemployed people don’t seem ready to go back to work yet.
  • When companies don't have an adequate labor supply, they typically do not make as much profit. Lower profits translate to lower stock prices—hence the sell-off scare we saw this week.
  • While the recovery is not happening as fast as investors would like, I still think it’s happening and that it could end up being a massive recovery.
  • So, despite some unexpected events and things not going as quickly as we’d all like to see, I still think we'll see all-time highs going into the end of the year.
  • But I do feel that there could be dark clouds ahead into next year with the debt we're incurring and inflation on the horizon. But for right now, I see no reason to change my investment portfolio, which is 50 percent energy and blue chip, 40 percent bonds and 10 percent real estate. 
Labels:

Comments

Post a Comment

Thanks for the comment. Will get back to you as soon as convenient, if necessary.

Popular posts from this blog

Top Five Consumer Cyber Security FAQs

Business, technology, environmental and economic changes are a part of life, and they are coming faster all the time. All of these changes and advancements can be distracting and make us more vulnerable to cyber scams. That's why protecting your credit is a critical part of protecting yourself from cyber security threats. Security researchers have reported that hackers and scammers are using any opportunity or vulnerability to target both individuals and companies. You may have already seen these attempts in the form of fake emails or calls. Here are the top five questions Equifax ®  has received about how individuals can protect themselves from cyber security threats and help to improve your credit protection. 1. How can I better protect my credit? Check your credit reports frequently. You can get free credit reports from the nationwide credit reporting agencies (Equifax, Experian ®  and TransUnion ® ) at annualcreditreport.com. Check your credit reports frequently to closely...
Post a Comment
Read more

School Choice Passed by Texas Senate

The Texas Senate on Thursday approved a $500 million school choice bill mostly along party lines after hours of passionate debate. It will now head for consideration in the House, where members rejected similar proposals during the regular session. Senators passed Senate Bill 1 by a 18-13 vote, with one Republican joining all Democrats in voting against the measure. The bill will likely face steep resistance in the House, where Democratic members and many rural Republicans have vehemently opposed such proposals. School choice programs, also called education savings accounts or vouchers, use public money to help pay for a child’s private schooling. “We must recognize that a one-size-fits-all approach doesn't fit the needs of our diverse student population,” said Sen. Brandon Creighton, R-Conroe, who authored SB 1 and estimated the proposal could serve about 60,000 students. Texas has about 5.5 million children in public schools. Public schools have failed the American people, especi...
Post a Comment
Read more

Diversity Programs Don’t Make Companies More Profitable

A new study by two scholars at the University of North Carolina and a professor at Texas A&M examined the impact of DEI programs in corporate America and found no evidence that these programs lead to higher returns. The study reported: “The business case for diversity” is the dominant rhetorical paradigm for how U.S. corporations debate actions and policies around racial/ethnic diversity. In this paper, we conduct an empirical test of the paradigm by gathering data on the race/ethnicity of the individuals shown on the leadership pages of S&P 500 firms’ websites as of mid-2011, 2014, 2017, 2020 and 2021, and then determining if any of nine measures of the racial/ethnic diversity of these executives reliably predict…their firms’ financial performance over the next fiscal year. We do not find reliable evidence that they do. As such, our results do not support the “business case for diversity” when the claim is assessed using 1-year-ahead financial performance metrics and multiple ...
Post a Comment
Read more