Yesterday was a challenging day for the markets. Today, we are eagerly awaiting the release of jobs data, while next week promises important indicators such as CPI, PPI, and Michigan Consumer Confidence. The Federal Reserve will closely scrutinize the inflation data. Although there has been a slowdown in rate hikes, yesterday’s events indicate that this respite may be temporary. Higher rates are poised to impact the economy.
Despite occasional setbacks, we observe a resilient consumer base with steady employment. They continue to spend, albeit with caution about the future. However, these attitudes are likely to shift as inflation subsides. Consumers and businesses will be affected by the drag of higher rates. As we discussed yesterday, the minimum payment may seem inconsequential, but the lasting repercussions will become apparent.
On a positive note, Meta has introduced Threads as an alternative to Twitter, attracting a substantial 30 million subscribers. While not a groundbreaking development in the grand scheme, it signifies innovation and the introduction of fresh ideas. Recessionary periods and uncertainties often pave the way for new opportunities, and it is up to businesses to adapt or face the consequences. Consider the cases of Sears, Circuit City, and Sports Authority, which were replaced by the likes of Amazon, Best Buy, and Dick’s Sporting Goods. The market is in a constant state of evolution, necessitating continuous education and discipline for fiscal investors. Perhaps this market is presenting us with new opportunities.
The upcoming week will likely continue to be volatile, but amidst the turbulence, numerous sprouts of a new economy can be observed. It is crucial to be willing to examine the data and facts objectively, setting personal opinions aside. Sears, once a prominent company with the tallest tower in Chicago, now faces competition from Amazon, which occasionally fails to deliver packages on time, despite often offering overnight service. The point is that the market undergoes changes, and we have adjusted our daily lives post-COVID. AI is an enduring presence; businesses must adapt or risk isolation in a diminishing business environment. On a brighter note, while your electric bill may increase, at least your gas bill will be cheaper because of that new $85,000 Tesla (or other EV vehicle). Evolve, assess data, and consider qualitative factors. Research and education will always play a significant role for Fiscal Investors.