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Good morning.

I wish I had the day off.  Seeing the red on my screen … and an S&P 500 index showing we have given back all of February’s gains (and then some) … forces me to wonder if those who called for tough times ahead are actually on to something.

Sorry if that sounded negative, but the very first article I came across early this morning … even before I got out of bed … was one included below in which Morgan Stanley’s “top strategist” claims the index could drop another 26% in the months ahead … calling the present situation a “death zone”.  Yikes.  That certainly doesn’t sound good.

It should be noted that not everyone agrees.

While Oxford Economics points out that Leading Index numbers signal only a “mild recession” … Daily Shot reports fewer firms are mentioning “recession” on institutional calls so far this earnings season.   Still, Deutsche Bank Research has a model (which is accurate more time than not) that shows a 90% chance of recession over the next 12 month.

I apologize if all this sounds confusing.  Certainly, it appears that there are dark storm clouds ahead … but what remains to be seen is if the forecasted storm will produce a slight shower … a heavy torrent of rain … of pass us over entirely.  Every day the forecast seems to change.

One area, of course, of largest concern is the Fed.  Just a short while ago there was a degree of comfort among investors that the Fed would shortly be turning off the spigot of rate hikes … pause … and review the success (or non-success) of their actions.  Now it seems the “terminal rate” (the rate at which the rising rates will pause) continues to rise … and the statements of “higher for longer” are becoming more believable.

Beating a horse that might be close to dead, I figure now is a good time to pass along one definition of “terminal rate” as expressed by Silicon Valley Bank.  The statement on their website is this is the rate “where prices are stable and full employment is achieved.”  Prices stable?  Full employment achieved?  Somehow, these scenarios seem to be components of days long ago … even though the turbulence experienced by both consumers and investors has only been recent.

That about sums it up for today as I’m not in the mood to write much more.

I spent an hour yesterday with my kid who is trying to learn Greek mythology for one of his history courses.

It has always been a problem for me … as I never did well with this stuff when I was in school and quizzes on this stuff lowered my grade.

Greek mythology has always been my Achilles elbow.

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
cell: (856) 625-7915

A Look At The News February 21, 2023

As of 11:15 AM today

Not everyone shares the opinion that the market has turned around … as Morgan Stanley top strategist feels stocks to be in a “death zone.” (BusinessInsider)


… but you could always invest in housing.  We don’t mean the type of housing you can actually live in … instead, housing in the metaverse … as your avatar has to live somewhere (DNYUZ)


As many of us do, you probably take photos on your iPhone … and just use the standard setting.  There is a way to “pre-adjust” your photos … so you won’t need to edit later (TomsGuide)


I have to think this through … and to figure out if it is just a way to pay a normal amount for an overpriced item … but appears to be an interesting approach to recycling clothes (TheCoolDown)


While a lot (as in a real lot) has been written about ChatGPT recently, there are many other sites out there that are also quite creative using “AI” (artificial intelligence) (WorkLife)


… but things continue to be changing quite rapidly. One example is with robots … which seem awesome and will never be used militarily.  Or is that just a hope? (Futurism)


The statements above are supplied for educational purposes only. The statements depict the viewpoints and opinion of the author and are not necessarily the views of Emerald Asset Management or its affiliates. The information described herein is taken from sources which are believed to be reliable, but the accuracy and completeness of such information is not guaranteed by us.