JAY POWELL SAYS THE MARKET IS WRONG
-“JAY POWELL SAYS THE MARKET IS WRONG?”-
-By Gary Kaltbaum-December 19, 2018-
-Did we hear him correctly? Jay Powell did not say the market is wrong in those words but he might as well have said those exact words. Jay Powell all but said:-
-Transports in a bear market are not telegraphing anything.-
-Russell 2000 in a bear market is not telegraphing anything.-
-Financials in a bear market are not telegraphing anything.-
-Regional banks in a bear market are not telegraphing anything.-
-Oil prices crashing is not telegraphing anything.-
-75% of the S&P in a bear market is not telegraphing anything.-
-1500-2000 new yearly lows is not telegraphing anything.-
-World markets in bear markets are not telegraphing anything.-
-Commodities and industrial metals in a bear market are not telegraphing anything.-
-Heavy machinery in a bear market is not telegraphing anything.-
-Retail in a bear market is not telegraphing anything.-
-Restaurants in a bear market is not telegraphing anything.-
-The 10 year yield down at 2.778 is not telegraphing anything.-
-Housing and housing-related in a bear market is not telegraphing anything.
-The Semiconductor index in a bear market is not telegraphing anything.-
-Corporate bonds being yonked is not telegraphing anything.-
-Instead, he is basically saying all is well, that economic expectations for 2019 are just swell…while the markets are yelling and screaming something is wrong. When arguably, the number one money man is sticking the middle finger back at markets that are yelling and screaming slowdowns if not more, that’s a big UH OH! Mr. Powell obviously does not know one of our most important bear market rules…and that is THE BEST ECONOMIST IS THE MARKET ITSELF.-
-We have no problem with the raising of rates. We really don’t have a problem with him saying they are looking to raise some more. (That will change!) The market will have a problem knowing that the Fed has absolutely no clue what the market’s own action is telegraphing and and as of this second, it is not telegraphing good economic expectations.-
The market is behaving like a spoiled child. There was nothing in his remarks to say he will keep raising rates of the data shows otherwise. He was like the adult in the room. Bottom line: the economic data he is looking at in the USA is still good.
Gary: I’ve listened to you for a long time (criticize the Fed for not raising rates sooner) and love your show. Keep up the good work. Imagine what the market would have done today if The Fed had done nothing? My guess is it would have tanked even more…..because all the THeads have said for weeks the December rate increase was coming and then it ain’t happening? Imagine that? Maybe taking the medicine now….and maybe a couple more next year…….will actually be good for the economy and help the markets get on a healthier path sooner, than later? And to your point many stocks are already in a bear market so what the hell….what’s a few more hundred points down today….except for GE!!