By Louis Navellier. Originally published at ValueWalk.
In his Daily Market Notes report to investors, while commenting on the hope for a ceasefire in Ukraine, Louis Navellier wrote:
Q4 2021 hedge fund letters, conferences and more
Right Call
Fed Chairman Jerome Powell testified before Congress the House Financial Services Committee on Wednesday and said the Fed still plans on raising key interest rates but also clarified that the Fed would “proceed carefully.” This last comment by the Fed Chairman triggered a big stock market rally.
And the Fed is going to be very cautious as they should be because the Atlanta Fed has already revised their GDP numbers down in the first quarter to zero, which means we’re teetering on a recession. So that’s the right call by the Fed.
There is no doubt in my mind that the Fed will raise its key interest rate 0.25% at its March Federal Open Market Committee (FOMC) meeting.
Ceasefire?
Another development is the hope for a ceasefire in Ukraine. The Russian troops are having a hard time. They’re running out of fuel and food. Morale is bad. I realize they can overpower Ukraine still, but it’s looking good for a ceasefire. Hopefully cooler heads will prevail and we’ll have some sort of resolution to this mess in Ukraine.
In the meantime, Russia has destroyed their economy. So they’re going to have to try to find some face-saving way out of this. And probably the best way is Vladimir Putin resigns and they get a new leader. But we’ll see what happens.
Nevertheless, there’s hope for the future despite hideous inflation. Let’s just remember that stocks are a great inflation hedge, that companies that are profiting from all this commodity inflation by raising their prices, that these stocks are the oasis out there. It’s time to go bargain hunting.
Ending on a Strong Note
The market is going to finish this quarter on a strong note. Usually, buying pressure kicks in in the second half of March, but we could get early.
Do not worry about oscillations in the market. The main thing is it looks like last Thursday was a definitive low and the market is going to trend higher from there. I’m very happy to see that good stocks bounce and a lot of money is pouring into our markets. The US is the oasis.
The Fed’s Beige Book survey was released on Wednesday and cited widespread labor shortages as well as frustration with inflation. The Beige Book survey cited modest to moderate economic growth in all 12 Fed districts, but implied that economic growth was held back by workers calling in sick from Covid testing as well as severe winter weather impeding growth. Especially, the survey implied that economic growth should pick up in the Spring with Covid restrictions being dropped and the weather improving.
ADP reported on Wednesday that 475,000 private payroll jobs were created in February. ADP pointed out that small businesses with 1 to 19 employees lost 95,000 of the 96,000 small businesses lost jobs. Overall, except for the small business sector, the ADP report is likely a preview of a favorable February payroll that will be announced on Friday.
Coffee Beans
According to the UN’s Comtrade database, Russian goods imports amounted to $247 billion in 2019. Motor vehicles and parts were the biggest items on Russia’s imports list with a total trade value of $23.4 billion, while industrial machines and electrical machinery and appliances completed the top 3. Following the ruble’s depreciation in the wake of Western sanctions this week, imported consumer goods are set to become unaffordable to many Russians if available at all. Source: Statista. See the full story here.
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