E Market Briefing For Wednesday, Jun. 2

Modest tightening not just by the US Fed (eventually) but by markets all by themselves as they perceive 'snugging-up' of global liquidity in 2021's second half, might well be a concern for the foreign markets as well as for our S&P.

However, there are new variants of COVID spreading, and if we see 'rebounds' of the virus this Fall, that could put a damper on some of the growth estimates out there. It's very hard to project, because (for-instance) right now many are opening-up economies, and others not. Singapore is reopening widely, while Japan is betwixt and between about the Olympics. Then there's Indonesia, for now better outcomes, while nearby Malaysia is locking-down fully yet-again.

So yes, 'if' there is modest tightening (and that's not certain regardless of what the FOMC says this month) it would imply most multiples remain constrained, so it would require earnings growth and/or upward guidance revisions being a key to take stocks higher. Having that guidance is absolutely at risk for now. It is also possible Gold works a little higher (Silver too) as Bitcoin's tarnished (GLD, SLV, BITCOMP).

As you know, I'm thinking we enter a rocky period again from perhaps early (ideally not this early) to mid-June, for 'awhile'. Probably the best 'actionable' advice I have given this year has been to 'not fight the Fed' and not short the Indexes, at least so far. The risk of meaningful declines is out there, but more on the order of timid interest in buying ahead of a testy Fed meeting ahead.

Investors that bailed because of overbought FANG stocks (we agreed on risk there and advocated that), but failed to see the rotation into other sectors like Oil, Banks & Industrials as we projected would take the helm, well they sure missed this market. I understand being conservative, but this market hasn't of course been a monolith since coming off our lows in March of 'last' year.

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William K. 3 weeks ago Member's comment

The very early report on the early spread points a guilty finger at the local governments in China, where the reporting via the fairly new system created after that SARS plague was avoided to "prevent loss of face," because of having disease in one's locality. And here in the USA the decision to give weeks of warning about travel restrictions was about as stupid as possible.

The very recent disclosure that the virus was an ecaped military weapon certainly backs up the claims that it did not just happen to develop.

So we have a vivid demonstration of exactly how much competence i lacking among those claiming to be our protectors.

Are we, as a world,doomed? Quite possibly.