BOOMFLATION?!?
When you see the so-called experts using terms like this, it’s a sign that we’re dealing with something that they don’t fully understand.
Last Friday, we saw an unexpectedly strong jobs report, with the American economy adding twice as many jobs as expected. About 528,000 jobs on a seasonally adjusted basis were added, far outpacing what we saw in June. Unemployment is also down to just 3.5%.
These are figures that you simply can’t reconcile with a recession. Yes, we do have two quarters of negative GDP – but it’s almost impossible to reconcile “recession” with a labor market this hot.
However, just because the jobs market is hot doesn’t mean that the econony doesn’t have problems. We’ve seen a number of major companies cut back in expectation of future trouble – I’m talking Walmart (WMT), Oracle (ORCL), Netflix (NFLX), Microsoft (MSFT), and others.
Inflation is currently at a 41-year high, at least according to the figures we got from June. Those figures showed inflation was higher than expected.
Given that the Federal Reserve has identified inflation as Public Enemy Number One, that’s leading a number of people to fear that the central bank could impose a crushing rise in interest rates.
All that said, I’m optimistic.
You know how doomerism makes me roll my eyes…
And a hot jobs market and strong economy that can be combatted by interest rate increases is more or less what we want. Of course there are dangers. But the whole point of raising interest rates is to tame an economy like this without pushing the entire thing into a severe recession.
Still, international tensions pose the real possibility of far worse economic problems. Take your pick – Ukraine, Taiwan, Gaza…
But on the home front, there’s reason for hope.
And we start this new week with an abundance mindset, focused on potential gains, not imaginary fears.
Keep Moving,
Any strategy that makes you money consistently is worthwhile.
Though many new traders believe that trading is primarily about indicators and tools, Chris maintains that it is at least 95% about emotional control.
This is especially relevant in this bearish, choppy market which has made the trading world extremely difficult.
Learn some pro tips to come back from your losses and stay in the game.
WORD ON THE STREET
Democrats On Attack, Biden Vs. Lazy Teenagers, Fed Promises Hikes
- Senate Poised To Pass $433 Billion In New Spending – With a favorable ruling from the Senate parliamentarian on their side, Democrats are ready to pass a massive series of new spending programs that will boost clean energy, reduce prescription drug costs, and impose a minimum corporate income tax. I’d invest in some extra accounting this year too – the Democrats are also funding an extra $80 billion for the IRS to beef up audits.
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Labor Participation Rate Down – While there was plenty of good news in last Friday’s jobs report, the labor force participation rate actually declined from 62.2% to 62.1% even as more than half a million new jobs were added. White House Press Secretary Karine Jean-Pierre said “the tick down this month was actually about teenagers.”
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Fed Governor Michelle Bowman: “Similarly Sized” Increases “On The Table” – There was a time when a three-quarters of a point interest rate increase would be considered something dramatic. However, in this economy, it’s almost routine. Federal Reserve Governor Michelle Bowman told the Kansas Bankers Association that she thought “similarly sized increases should be on the table until we see inflation declining in a consistent, meaningful, and lasting way.” With the strong labor market, the Fed may be more concerned about controlling inflation than about kickstarting economic growth through loose money policies.
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Trump At CPAC: End The “Deep State” – While the Department of Justice is reportedly musing charges against former president Donald Trump, ’45 retains strong backing. Speaking at the Conservative Political Action Conference in Dallas, Trump told a supportive crowd that “another key priority for the next Congress and the next President will be to drain the swamp once and for all to remove rogue bureaucrats and root out the deep state.” The phrasing here is interesting because it seems Trump is opening the door for someone else to be the “Trump” candidate if he himself doesn’t run.
HOT SPOTS: What’s Going on in Geopolitics
- Vatican Faces First Ever UK Trial Over Land Deal – Raffaele Minicione, a former financial advisor to the Vatican, has won an important victory in UK courts that will allow British judges to hear a lawsuit. It will be the first time ever the Vatican will be a party in British courts. The Vatican has accused him of financial fraud after he sold them a property the Vatican later resold at a 140 million pound loss. Minicione is preparing legal action to regain his reputation and push back against the charges.
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China Simulating Airstrikes Against Taiwan – Chinese forces continued their military drills to intimidate Taiwan in what is probably their final day. “The drills focused on joint fire land strikes and long-range air strike capabilities,” said China’s Eastern Theater Command. The Chinese government has reacted furiously against Speaker of the House Nancy Pelosi’s visit to Taiwan, which the People’s Republic considers part of its sovereign territory.
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North Korea Offering Reinforcements For Russia? – Russian television is discussing a reported proposal from North Korea to send 100,000 “volunteers” to help the Kremlin wage its war of conquest in Ukraine. North Korean defector Grace Jo reports that such “volunteers” would actually be people made up from the lowest sociopolitical class who are then forced to fight.
CUTTING EDGE: What‘s Happening In Tech
- California DMV Going After Tesla – The state of California is continuing its attack on Tesla. California’s Department of Motor Vehicles claims that Tesla (TSLA) made “untrue or misleading” statements about its autopilot and self-driving capabilities. The DMV charged that the advertisements constituted a “deceptive practice.”
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People Spend 4-5 Hours A Day On Apps – On my deathbed, I’ll have just one regret – I didn’t spend enough time on phone apps. According to the website Data Ai, customers in more than 13 markets, including the United States, the United Kingdom, Mexico, South Korea and others, spend more than four hours a day on apps. In Indonesia, Singapore, and Brazil, people are spending more than five hours a day on apps.
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Elon Musk Challenges Twitter To Debate – Say what you will about him, but Elon Musk does not do things quietly. Now mired in a legal battle with Twitter (TWTR), Musk has challenged CEO Parag Agrawal to a debate on whether Twitter had provided him with “outdated data” regarding bots. Musk issued the challenge on Twitter itself. The forms have been obeyed! Let the duel commence!
FOR YOUR CONSIDERATION
“I’ve had several conversations this week with subscribers about minimizing risk. Most believe that the job of a trader is to win trades and make money. However, the real goal is to not lose it all.”
Trading is warfare by other means. And you need to have a Warrior Mindset.
Your Options Coach Chris Hood shows how you can discover your “Pain Point” so you know how much to invest while not compromising your killer instinct.
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