Thursday Failure at S&P 4,000 – Again


S&P 500 with 5% Rule Applied This is getting annoying.  

An optimist might say we are consolidating for a move up (like late July) but a realist might say earnings are not really justifying a move to the top of our range and the Fed will still be tightening and the War in Ukraine continues and Covid is still a thing with Christmas just around the corner (also the worst flu season in 20 years will kill 100,000 Americans).

ImageThe GOP has clinched control of Congress (218 to 211 with 6 races still undecided) and they’ve made it very clear they intend to shut down Government over the debt ceiling again and then they will impeach Biden (reasons to be determined at some point) and then they will do whatever is possible to derail any progress we’re trying to make combatting climate change.  Because that’s their thing and, apparently, people voted for it.  

None of these things will happen for at least two years as the Democrats still have the House and the Presidency – but they don’t have the Courts, which makes everything a wild card and Congress controls the Budget – so the GOP will be able to wrangle a lot of concessions if the Dems want to accomplish anything at all over the next two years.  

Industrial Production and Cap Utilization both fell a bit yesterday, rather than build a bit, as expected by our Leading Economorons.  The Fed is certainly succeeding in slowing down our economy.  Whether or not that’s a wise move remains to be seen in the longer run.

This morning we’ll get a dreary report on Housing Starts and the Philly Fed (10 am) should be sad as well – nothing likely to boost us back over 4,000 and, as I said in yesterday’s Webinar, I’m not seeing a catalyst until about March so I’m not sure its wise to leave our money in the markets into the holidays.  

We’ll be deciding that today as we continue to review our Member Portfolios.  


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Good Morning.

Gooood morning Vietnam!!!!!

Phil / BABA – Target date set for PCAOB – DECEMBER Decision?

Yesterday PCAOB Chair Williams’ speech at the 14thInternational Institute on Audit Regulation commented on the Hong Kong visit, return home, and ongoing inspection of Alibaba, YUM China, and’s auditors (PWC, KPMG, and Deloitte, respectively). She stated, “In December, the PCAOB will make determinations whether the PRC authorities have allowed us to inspect and investigate completely or whether they have continued to obstruct.” So a finish line is given! 

hi did anyone hear about housing starts and philly fed i cant find it anywhere.

I’m hoping with the FTX collapse we will see some of those crypto traders abandon all hope and move into the market. Alot of them were under the illusion crypto protected against inflation so my bet would see them buying land, gold, fine art, and TIPS, but we may see those addicted to 24/7 trading diving into futures as well.

Hmm. Been a little while since I’ve seen BDC. Hope he/she didn’t suffer in the collapse.

Phil/Reviews: Where can I find that Earnings Report review?

S&P underperforming the DOW since April, usually the other way around.

you didn’t say that the Republicans released the “Commitment to America” graphics but I wanted to point out that it’s a fake. 
I don’t think they have said it out loud yet as a “Commitment”.

For all,
As I was researching this I came across Rick Scott’s plan and found something that I consider funny.
According to Rick Scott, it you don’t agree with God’s design you are denying science.
That’s FUNNY.
( I don’t agree with Rick Scott and I’m only including his plan as a source reference).

8. We will protect, defend, and promote the American Family at all costs. The nuclear family
is crucial to civilization, it is God’s design for humanity, and it must be protected and celebrated. To say otherwise is to deny science. The fanatical left seeks to devalue and redefine the traditional family, as they undermine parents and attempt to replace them with government programs. We will not allow Socialism to place the needs of the state ahead of the family.

Phil / Inflation –

My view (which is not unique) is the most significant driver of inflation is China’s 0-covid policy…. They have essentially choked off supply of the key drivers of inflation…. Once they open up or become significantly less restrictive inflation should abate within 3 to 6 months depending on the supply chain . They announced less restrictive covid policies this week specially stating the supply chain shut downs should be minimized if possible. This is the first step, If this continues to open up – based how the population reacts ( deaths) they will continue…. By Q1 we should see more, and by Q2 more… so anywhere from late Q1 to early Q3 supply should get better…. Supply chain ( sea shipping) is getting close to normal.. Only issue is if by that time the Fed has already decimated the economy to where it cannot bounce back. I assume Biden and his sec of State will be focusing more on this at their CHINA meetings.

One of the key drivers I think was HonHai announcing they were ramping up 150 to 250K hiring in India. India is the only country with the population and cost structure to unseat China…. This is a major issue and one that is not taken easily and one that will not be reversed….