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Good morning.

The headline of a “Morning Brief” article on Yahoo Finance claims: “The Pieces of the Next Bull Market are Starting to Come Together.”  Well, you wouldn’t know that by this morning’s action in equities as stocks dropped from the opening bell amid renewed recession fears.

One of the catalysts, of course, has been the Fed continuing to raise rates to cool down what was seen as an overheating economy.  Even though there has been a substantial boost in rates this year (so far) Americans continue to spend … as retail reports were better than expected.

But what might have worried investors this morning were comments by St. Louis Fed President James Bullard who not only said … according to CNBC … the central bank still has a lot of work to do before it brings inflation under control … but went on to provide the opinion that the eventual rate could be in the 5% to 7% area … the top range of which is much higher than many others forecast.

Is it the purchasing habits of the American consumer that is to blame?

I will say, it is quite easy to buy things right now.

As an example, my son asked for a string of LED lights (strange kid).  In the “old days” I might drive to Home Depot or Wal-Mart … look around … read some boxes … and pick up a set … or maybe even then go home and think about it.  Now?  Amazon + search + quick description read + reviews (some of which might be planted) … and they are ordered before I start my next paragraph.  On top of that, they might be here before the end of the day (if I order in the next 1 hour and 12 minutes).  Easy … smart … addicting … and absolutely dangerous.

But what is one thing people don’t seem to be buying?  Homes … as homebuilder optimism is down, buying traffic has decreased and mortgage rate applications have fallen to such an extent that Daily Shot reports we are seeing the largest year-to-year decline on record.

Still, it is tough the figure out when recession will arrive … if it does at all.  Goldman Sachs feels one will be avoided and AtlantaGDP Now points to a robust 4th quarter of the year. Is inflation something we will live with for years to come?

Meanwhile, we have the yield curve (10 year yield minus 2 year) … not only remaining inverted (claimed to be a sure recession signal) but a curve that is the most inverted in 40 years!  Yikes!

I guess I’ll close out today with Elon Musk. I don’t know why. He just popped into my head.

According to NPR, Elon Musk told his workers at Twitter they must be prepared to work long, hard hours (“need to be extremely hardcore” is how he put it) … and, if not, they are invited to immediately resign with 3 month’s severance.  This is following his demand they come into the office for at least 40 hours each week.

The result will be interesting to see … as recent reports nationwide claim employees want to work less, not more … and certainly don’t seem to want to be dictated as to hours or even location.

Elon Musk also claims he will find a new CEO for Twitter “over time” and hand over leadership.

I get the feeling that a lot of employees … and a public tired of the crazy news stories … very much hope for this to happen before the weekend is out.

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


A Look At The News | November 17, 2022

As of 11:05 AM today …

Recession and inflation fears returned in the last few days and comments by St. Louis Fed President Bullard certainly didn’t help (CNBC)

… but continuing inflation won’t be a worry for one of the “winners” of the Denny’s $6 tee-shirt, for a year’s worth of free food comes with it (FoodAndWine)

How old do you have to be to travel alone?  Many will find the answer to be a surprise … as we don’t normally see 5-year-olds walking through airports (USAToday)

Will the Metaverse fail … as badly as some claim? There are some that think writing a eulogy is premature as they hope for eventual success (MarketWatch)

One of the complaints about “wind power” is the waste accumulated when the blades are no longer functional.  But what if they are made of sustainable wood? (Electrek)

Prostate cancer is one of the most common cancers for men … so studies on this “one hour cure” should certainly be put on the front burner (TheBrighterSide)


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.