Mike Lipper’s Monday Morning Musings
Warnings Increasing
Editors: Frank Harrison 1997-2018, Hylton Phillips-Page 2018
Preface
I cannot predict the future, and I believe none can. The
best I can do is use a life-long habit of dealing with chances of what may
happen. In other words, odds are one possibility is more likely than another.
We all hope that the various problems facing the financial
world will be quickly solved to our personal benefit. However, as a trained
analyst I am compelled to increasingly doubt the expressed views found in most
US media and by other pundits which are not completely echoed beyond our
borders. These items came out last week.
Worry List in Chronological Order
- The number of farm bankruptcies rose 40%. (The same thing happened before the depression.)
- The University of Michigan Consumer Confidence Survey dropped to 93.1 from 93.7.
- Another Fund Management Company is looking to find a new home - Dimensional Fund Advisors. (I expect there will be others.)
- Perella Weinberg, an investment bank, is laying off 10 partners and 10% of the firm. (More to come?)
- Gary Shelling predicts a 30 % chance of a S&P 500 bear market in 2026 and a 60-70% chance in 2027.
- Canada has economically contracted for 3 of the past 5 quarters, falling into a recession. (The US is their largest customer, and our companies own lots of Canadian companies.)
- Prudential Insurance, Meta Holdings, and Johnson & Johnson, are compelled to announce layoffs.
- On Friday, the last day of the month, more stocks were sold on a decline on both the NYSE and NASDAQ. However, this may be typical selling before the weekend.
- In May only three S&P 500 sectors rose: InfoTech+5.6%, Consumer Discretionary +0.26%, and Healthcare +0.21%. Eight sectors fell.
- The three forces that led to the market index rising were: Affluent Consumers, “AI” investments, and Asset Allocation. (Contrary points: Inflation was up more than wages. Other industries that were similar and didn’t work out: canals, railroads, radio, airlines, atomic energy, and computers. Bonds were a safe way to beat stocks and “private debt and equity”)
Warning: Be Careful, Let Others Have Some of your Winners.
Did you miss my blog last week? Click here to read.
Mike
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