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Good morning.

It seems like so much time has passed, but it was only a week ago yesterday that the Dow shot up almost 1,000 points and when the Fed was mentioned, it was normally accompanied with a smile. That certainly didn’t last.

Since then much has changed as inflation continues to whittle away at our savings and investors are reading a growing number of opinions promising more tough times to come.   Experience has taught many to “stay the course” … but it gets harder and harder when you see daily portfolio values decline.

A few are sensing value in some of the beaten down names … but the saying of “don’t catch a falling knife” continues to haunt.  I did something akin to this yesterday and will share that my hands are bleeding as a result.

I saw this “crypto” was down to around $1.15 … and figured I would pick some up.  After all, I am a logical guy.  It was over $30 on Tuesday and $80 the week before that.  Oh, how I imagined it would jump up and I would celebrate with a nice cold Stiegl Radler (my favorite beer).  Well … crypto Armageddon happened in the last day … some of the “stable” cryptos … which were never supposed to fall below $1 (thus the name “stable) … fell below that amount … with one doing much, much worse.

Oh, and my $1.15 “investment” (which would have been better defined as speculation)?   It is now valued at just under $0.01.  I didn’t catch a falling knife.  I caught an anvil.

Meanwhile, markets turned positive as I was writing the last few paragraphs … so maybe I should keep writing.

Getting back to inflation, Pantheon Economics reports economists expect it to moderate in the months ahead.  But when?   Meanwhile, Daily Shot tell us Consumer Sentiment is expected to decline.  Thanks for that … but I saw one chart where consumers claim they will cut back on dining out.  That remains to be seen here in the northeast … as the weather is getting nicer … and people are sick and tired of being indoors for the last two years.

While you might wonder if the recent pickup in Covid cases has any effect, Gallup brings us an interesting survey result.

According to Gallup, the “level of worry” over Covid is the lowest since July 2021.  The use of masks?  Lowest since April 2020.   Social distancing efforts?  At pandemic lows.  All this, even as cases are rising.

So that about wraps it up for today as I go about what has become my normal routine of looking at the markets in the morning and feeling fine … then seeing it at around 3 PM and feeling ill.

Sorry to giving my opinions about inflation so much in recent days

… just throwing in my three cents.

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
wit@teamemerald.com
 #vaccinatetosave

 

A Look At The News | May 12, 2022

As of 11:41 AM today

As if Americans need data to tell them inflation is “through the roof” (an economic term that has nothing to do with home prices) the Labor Dept let us know prices are climbing (FoxBusiness)

https://www.foxbusiness.com/economy/wholesale-prices-producer-inflation-april-2022

… and Mohamed El-Erian is giving the warning that we may be entering a “cost of living crisis” with a dire recessionary comment (VerveTimes)

https://vervetimes.com/el-erian-warns-of-cost-of-living-crisis-says-fed-rate-hikes-could-cause-recession/

… but, for now, many are figuring out where best to spend money … and where to cut back … and this article gives an idea of what many are thinking (CNBC)

https://www.cnbc.com/2022/05/11/where-consumers-plan-to-cut-spending-as-high-inflation-persists.html

One of the investment horror stories of the day has to do with a “stable coin” … the world’s largest (whose value was supposed to always be at $1) … falling below this “peg” (CNBC)

https://www.cnbc.com/2022/05/12/tether-usdt-stablecoin-drops-below-1-peg.html

So far we have had 1 million reported Covid deaths in this country … but, fortunately, fatalities appear to have slowed substantially (ABC Australia)

https://www.abc.net.au/news/2022-05-12/united-states-passes-1-million-deaths-from-covid-19/101062676

… but if you do get Covid … what do you do?  One thought is to try to get Covid pills without delay, and this article gives on opinion on what and how (NPR)

https://www.npr.org/sections/health-shots/2022/05/11/1097698090/3-ways-to-get-covid-pills-if-youve-just-tested-positive

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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.