Time for a surprise rally?
Futures were up early this morning and Asian stocks were rising…
However, things can shift quickly, as countries around the world are considering further hikes on interest rates, something that could challenge growth prospects.
At a recent international summit, Russian president Vladimir Putin spoke about a new world order and the end of American leadership. In other words, the war in Ukraine will continue and that will provide further challenges to already struggling supply chains.
Here’s the thing though – problems that are predicted in advance don’t generally happen.
The reason Europe is in trouble is because Germany never thought it would have to cut itself off from Russian energy.
The reason Russia is in trouble is because it didn’t expect ferocious Ukrainian resistance to turn its so-called “special military operation” into a meat-grinder.
The most dangerous attitude in investing and life is thinking that because something is happening now, it will continue forever.
Believing that real estate prices could only rise got us the 2007-2008 financial crisis.
Believing that cryptocurrency would sweep all before it has led to the current valuation crisis.
And, perhaps, believing that the era of great power warfare was over is setting us up for another global economic panic.
Yet at this point, markets have priced in the situation in Eastern Europe. Potential food crises, energy shortages, and supply chain disruptions are already being considered. We’re seeing a shift in market activity, not necessarily a slowdown.
While most Americans are still pessimistic over the long term state of the economy, there’s a great deal of optimism today. Frankly, I don’t expect it to last. However, tech stocks look awfully tempting at these prices.
Trust the charts as always, but don’t give in to doomerism. Remember, even if we’re in a bear market, that doesn’t mean this is simply the way things are now and forever. Markets adjust, adapt, and overcome.
That’s why the pricing system works. Nothing else can incorporate the vast quantity of economic data (and the irrational desires of human psychology) into one piece of information that you can act upon.
Ultimately, that’s all a price is.
So even if you think we’re heading into a recession, don’t let that distract you from moves you could make today. Investing, like everything else, is ultimately about timing. In a climate this volatile, speed and liquidity are preferable to almost anything else.
The opportunities open and vanish more quickly than ever. We’ll help you win this race against time – because you aren’t in it alone.
In this week’s Hood Talk, Chris looks at the market through three time frames – the daily, monthly, and weekly charts.
This isn’t just guesswork, but an analysis using tools that hedge funds are willing to pay millions of dollars to use.
WORD ON THE STREET
Russia Attacks, Airline Pulls Back, Relief On Gas Tax
“The Most Difficult Fighting” – Ukrainian president Volodymyr Zelenskyy admitted that his country faces a tough situation fighting for the Luhansk region, the area he identified as the “most difficult” to defend. Russian troops captured two towns around the city of Sievierodonetsk and many expect Russia to launch a major attack on the city imminently.
Lithuanian Cuts Off Russian City – Kaliningrad, a Russian enclave between Poland and Lithuania, is facing economic ruin after Lithuania cut off railroad transportation in order to comply with EU sanctions. Russia promised retaliation, but its options may be limited. Unlike Ukraine, Lithuania is a member of NATO.
Pilot Shortage Causing Cutbacks – American Airlines has had to end service to Toldeo, OH and Ithaca and Islip in New York because of a “regional pilot shortage.” It’s not the only company that’s struggling… Delta has cut about 100 flights from next month’s schedule and pilots are complaining that they are flying a “record amount” of overtime. Expect to see some big movement in this sector, especially with calls for mergers or more government assistance.
POTUS Considers Populism – President Joe Biden is attempting to turn the tables on Republicans by proposing a gas tax holiday, possibly by the end of the week. The president is betting that Republicans won’t support the idea because they know the Commander-in-Chief is being hammered by the inflation issue. However, no political solution is perfect… a gas tax holiday might pause some of the infrastructure programs that are among the Administration’s chief accomplishments.
HOT SPOTS: What’s Going on in Geopolitics
- Israeli Government Collapses AGAIN – Five elections. In 3.5 years. One begins to think that monarchy has something to it. The Israeli government has once again collapsed after Prime Minister Naftali Bennett and Yair Lapid gave up on trying to keep the coalition together. With former Prime Minister Benjamin Netanyahu itching to return to power, this always seemed like just a matter of time.
Leftist Triumphs In Colombia – In Latin American politics, Colombia has always been the conservative exception to leftism. However, it’s the end of an era, as former guerilla fighter Rodolfo Hernandez has won the most recent election. It could vastly complicate American relations with the country as Colombia may seek new alliances. “Yankee Go Home” and all that.
China Building Missile Defense – China claims to have reportedly shot down a ballistic missile in a successful test of defense systems. It’s especially impressive because it shot down the missile during its “mid-course” phase, when it is flying fastest and outside the atmosphere.
CUTTING EDGE: What‘s Happening In Tech
Telegram Unveils Paid Option – As major companies and governments around the world try to censor information, Telegram stands out. It’s become especially important as both Ukrainians and Russians try to get their messages out in the battle for global public opinion. Now, Telegram has a paid tier, which will offer additional features for $4.99 a month. That said, don’t assume it is secure – a NATO aligned think tank recently found that Russian intelligence may be able to break its encryption.
Mark Zuckerberg Designing Metaverse Clothes – Something died in my soul as I heard about this. Luxury fashion brands are reportedly working with Meta Platforms so your avatar in the metaverse can have digital clothes. “Digital goods will be an important way to express yourself in the metaverse and a big driver of the creative economy,” Zuckerberg said. This from the guy who turned a sweater into CEO wear.
Drone Hunting – In contrast, writing this made me very happy. Amazon is reportedly bringing drone delivery service to a rural town in California called Lockeford. However, not everyone is happy, with some even threatening (or joking) to shoot down the drones. An Amazon spokesman said that those who did this would be breaking the law. Let’s have a compromise where you can only shoot down drones in season.
FOR YOUR CONSIDERATION
“China is also taking steps to become a more insular, self-sufficient and autonomous power. Beijing sees itself as a ‘center’ that will have a place in the new multipolar order.”
Russia is making some big moves on the world stage, with Vladimir Putin openly declaring his intention to create a new global order.
However, while Russia pays the price for its imperial ambitions, a greater power is taking notes… China.
Mr. X writes on why China will ultimately side with Russia in the long-term… but when it comes to Ukraine, Russia is mostly on its own.
In this new world of competing global powers, you have to prove your right to be taken seriously.
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