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Crossing Wall Street - 9/6/22 - Review of the Markets

beebee
in Other Investing
The late summer stall is now turning into something substantial. In 14 trading days, the S&P 500 has given back 9.22% which is more than half of what it gained in the previous two months. As I’ve said, all bear market rallies should be assumed to be phony until proven otherwise.

The big battle on Wall Street right now is for what the Fed will do at its meeting later this month. Some traders expect a 0.5% rate hike while others think it will be 0.75%. Thanks to Powell’s “pain” comment in Jackson Hole, the 0.75% crowd has the upper hand. Still, the jobs report gave the 0.5% hike faithful some ammo. My take is that we should listen to Powell. There’s going to be more pain ahead.

The 60/40 Portfolio?
The culprit isn’t hard to find. It’s inflation. Inflation acts like kryptonite to financial markets. This means that the two elements of the 60/40 portfolio aren’t balancing each other out. Both are down. Higher prices have caused bonds to fall. Plus, the Fed’s response to inflation has led stocks to fall.

cws-market-review-september-6-2022

Comments

  • hank
    edited September 2022
    I disagree a bit with the above analysis. ISTM what we’re witnessing with the reputed demise of the 60/40 is more of an abnormality - a “transitory” condition (to borrow a phrase). But that’s only my best guess. Further, I’ll side with Twain on the question: “Reports of my death are greatly exaggerated.”

    This writer provides a lot of thoughtful analysis in the “free” version of his commentary, while hoping you’ll subscribe to the paid edition. I’m saddened to hear TR hasn’t performed well. Really enjoyed those things when I was about 5.

    “The sad truth is that Tootsie Roll’s business hasn’t done very well in recent years. It’s been mostly flat. The company has issued 3% stock dividends each year for the last several years. (That’s effectively a 103-to-100 stock split.)”

    I’m thinking demographics have a lot to do with the problem. I don’t see many of my acquaintances in the 75-90 year age group munching on tootsie rolls. In fact, if missing some teeth it seems to me they would be hard to chew. Might choke on one.
  • carew388carew388
    This 61 year old sans wisdom teeth still prefers Mound Bars, Snickers and 3 Musketeers bars over Tootsie Rolls any day!
  • beebee
    edited September 2022
    @carew388,

    This company's stocks would have afforded you the sweet meat and the treatment (dental bill on those wisdom teeth). HSY has had a great 1Yr, 3 Yr, 5 Yr, 10 Yr, 15 Yr returns.


    https://morningstar.com/stocks/xnys/hsy/chart

    image
  • CrashCrash
    :)
  • carew388carew388
    +1
  • Derf
    Do "you" have any idea where those bit size candy bars are now made ? Mexico ! Enjoy
  • beebee
    @Derf, Big Sugar working the border:

    ustr.gov/sites/default/files/files/agreements/FTA
  • AnnaAnna
    Can hot chocolates be far behind (also available in medium and mild).
  • Derf
    Not only that , but chips of one kind or another. No more "Pringels" for me for some time now.
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