Joseph G. Witthohn, CFA
VP of Product Development Emerald Asset Management

Good morning.

Last week was pretty tough on the market … as stocks fell every day since the Labor Day holiday … while today is offering a bit of sunshine as it appears that the losing streak might be coming to an end (though the S&P did turn slightly negative in the last few minutes).

But there seems to be an increasing amount of fear out there.

Let’s think back a few months.  There was great joy throughout the land as visions appeared of “life after Covid” … and people who had been saving money would be set free to run out do what Americans do best: spend!  Strategists were fast to call this the “Roaring 20’s” adopting a vision of an economic engine running at full capacity.  

Oh, how nice it is to dream. 

Today, though, a different picture is starting to take shape … and it has little to do with concerns that the virus chapter is far from complete.  Instead, the focus is on inflation and taxes.

These are not minor things … as they can greatly upset spending and shake up recent forecasts.

Sure, inflation was expected (and possibly factored in) as demand was seen to be strong … but just a short while ago we read how a reduction in corporate taxes could make our products more competitive and entice companies not to move facilities to tax-friendlier lands.  Many of us nodded in agreement that this made sense (and would help shareholders at the same time) … certainly seen as a “win-win.”   But now there is talk of raising corporate taxes … and the naïve among us (me included) are left wondering why if lowering taxes was seen as profoundly good, how raising taxes should be considered good also.  It they are, the conclusion will be that taxes don’t matter … with the realization thinking like that will make me well prepared for a government position.

We reached the 20th anniversary of Sept. 11th over the weekend with great sadness over the event and the lives lost.  Of course, there was quite an effect on the markets at the time so I jumped back to look at how the Dow was on the day before and what happened since (as I thought it would be interesting).  The Dow on Sept. 10, 2001 was 9,605.  Today, it is 34,858 … 3.62 times as high … even with the many things that have happened in between.  

Why do I bring this up?  Because if the Dow has a similar 20-year run from now it would stand at around 126,500 in 2041.  Think about that … 126,500.  Now … why do I have so much in the bank earning 0.10%?

That’s about wraps it up for today.  I’m a bit late, and I’ll blame both Monday and laziness.

There’s always something.

Have a great day,

Joseph G. Witthohn, CFA
Vice President
Emerald Asset Management PA, LLC
610 Freedom Business Center Drive
King of Prussia, PA 19406
Direct: (610) 285-9905
cell: (856) 625-7915


As of 11:59 AM today …

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