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Good morning.

I attended an all-day event yesterday and only glanced at market performance late in the day.  I looked again … to confirm what I saw … but it was hard to see the numbers clearly through my tears.

Fortunately, today is a little better … but the messages heard during the storm yesterday from economists didn’t seem to promote sunshine ahead.  Inflation, labor costs and a tightening Fed were topics addressed by everyone … what I was unable to determine is how much of that is already priced in to the recent stock bloodletting.

But while sentiment is “bad” a big question is whether or not actually this matters at all.

Jim Furey, of Furey Research Partners, recently pointed out that sentiment over the last 3 months “has been among the most negative on record” … but is quick to point out that, following this type of scenario, forward returns have been “nicely positive” (his words, not mine) in the 3, 6 and 12 months to follow.  That being said, a lot depends on whether or not we are to enter into a recession.  If we do, there could be more pain ahead … but a lot depends on not only whether or not we do fall into a recession but … of course … how severe it might be if one does appear.

Employment numbers came out this morning and over 400,000 new jobs were created.  This would normally be fantastic news, but what remains to be seen is if it gives the Fed additional tightening ammo in their fight against inflation.  New jobs could result in higher “demand” for goods (and higher prices) but I did see something quite interesting on this.  The Bureau of Economic Analysis (“BEA”) looked at the relationship and reported that many industries facing low demand are also ones sharply raising prices.  Low demand and higher prices?  There goes those economic classes I took … right out the window.

And, by the way, at the indoor event I attended yesterday … one or two masks worn in the entire ballroom.  I bring this up because I read this morning (via Axios) that a majority of Americans … in both parties … support mask mandates to remain at airports.  So I find it interesting that, locally, very few follow this and wonder if the reason is people won’t wear one is because they: a) believe the virus is over, b) believe it is still here but want ever so much for the virus to be over, c) believe masks are useless, or d) because of peer pressure.   Of course, I didn’t want to conduct a survey as I sense the topic angers too many people and the diners had knives in their hands.

On a final note … speaking of surveys … there is a finding from “Five Thirty Eight” that a majority of adults in every single state, regardless of political party, feel marijuana should be legal.

Some of this is probably due to tax revenues … but I have a different reason as to why it is so popular in Oklahoma.

No, it is not because of the taxes though the reason is economic just the same.

This is where they make Doritos.

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 | May 6, 2022

As of 11:52 AM today

The jobs market continues to be strong as many wonder just how inflationary it will be as wages rise and demand for items pick up (NPR)

… but one thing a lot of people certainly seem as if they will be buying is allergy medicine … as this year is one of the worst ever, according to one allergist (TheHealthy)

Are you looking for a new pair of glasses?  Well, if the problem is not too serious all you might need is some eye drops, recently develops, which could make things a bit clearer (ScienceAlert)

If you want to join the chorus of those singing the praises surrounding their new jobs, it might be wise to have a polished resume in hand … making these strategies important (CNBC)

Sadly a whale turned up dead in Greece … but to add to this was the discover that the death might have been caused by the amount of plastic ingested (Newsweek)

… meanwhile, a lot has been written lately concerning problems surrounding deforestation.  How can people help?  By reducing the amount of beef they consume (Wired)


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.