caltrek wrote: ↑Mon Mar 21, 2022 4:22 pm
Investors Ignore Inflation, Shrug at Fed’s Rate Hike and Overlook Ukraine War
by Nick Rummell
March 18, 2022
https://www.courthousenews.com/investor ... raine-war/
Introduction:
MANHATTAN (Courthouse News) — Inflation has not abated, the Federal Reserve finally raised interest rates, and Russia’s invasion of Ukraine persists at a terrible human cost. And yet Wall Street rallied midweek and ended Friday on an extremely high note.
By the closing bell, the Dow Jones Industrial Average gained 1,805 points for the week, while the S&P 500 and Nasdaq also pulled down big wins, nabbing 260 points and 1,050 points, respectively. The S&P 500’s gains were one of the best weekly outings for the index since late 2020.
Wall Street tries to remain days if not weeks ahead of announcements, and investors already have largely discounted inflation as well as the Fed’s interest rate hike. Instead, investors have focused primarily on kernels of good economic news over the past few days.
One of those kernels has been the price of oil. On the West Texas Intermediate exchange, barrels of crude oil dropped from about $110 to $93 earlier in the week. With Russia-Ukraine peace talks sputtering, barrels again rose above $100 a barrel but did not increase to their previous highs.
“Inflation will peak soon and there are plenty of signs pointing to a global economic slowdown regardless,” James Vogt at Tower Bridge Advisors wrote in an investor’s note Friday morning, noting that supply-chain backlogs are decreasing, oil prices have pulled back 20% over the last three days, and manufacturing indexes are dropping.
I can't tell to what degree the behaviour I've been watching is people building sandcastles on the beach and selling shares before the tide comes in, and what degree of it is the fact that since the great depression and 2008 there has been a change in investing that changes how it responds to the four horsemen.
I mean there is probably some 'it's a faith based money system, so if you just believe enough that it's going up, it will keep going up', while there is also a bit of over correcting 'buy the dip' doing on where folks see any small drops as a mark down sale which jumps the demand and causes a rise, and people hold through that expecting it either won't dip again, will return to this level after short dips, or will always climb.
But there is also a lot of corporate buy back, expectation that their losses will be bailed out by tax payers, but the profits are theirs to keep, And there is the military industrial complex and mercenary groups that can be invested in, pharma, and record profit shares in many monopolistic companies from 'inflation' on the food and fuel people need. It's a great time to be a share holder.