Note to Readers from Larry: We’ll assess upcoming inflation and FOMC for members after the data is released. The real reaction strategy for binary events like Inflation/FOMC comes afterwards, and not before it. As long as you’re positioned appropriately, there will be plenty of time to act afterwards.
Aggressively positioning right into a binary event is like betting on Sports Teams and their outcomes - could work, but not something that we do. The best positioning before these events is weeks before it (our opinion to reduce at SPX 4100), not 24-48 hours before the actual event (long/short SPX at 3990 in no man’s land).
Check out our latest email note for up-to-date thoughts. Stay emotionally calm regardless of what happens. This is an important event, but just one of many in the coming weeks and months.
Santa could be coming to town. But remember - even the most popular holiday of the year doesn’t last forever.
On Wednesday, the Federal Reserve is expected to raise its key interest rate by 0.5% to a range of 4% to 4.5%, the highest since 2007, and to signal further increases in early 2023.
On Tuesday, the November CPI is anticipated to show that while inflation is slowing down, it is still too high.
A strong US economy could actually be bad news, as it would force the Fed to continue its aggressive policy tightening, putting the benchmarks on track for its worst year since 2008.
Macro Chart In Focus
Analyst Team Note:
“China exports -8.7% in Nov (Chart 2), ending 2 strong years of sole growth spot (no supply chain issues here) for China economy…no surprise China reopening to tap excess savings, quell civil unrest, reduce 18% youth unemployment.” - BofA’s Michael Harnett
Prices for vegetables have almost doubled since last year after the states that grow fresh produce for the US winter saw water cuts and storms that decimated supply.
Vegetable prices saw a 38% jump in November from the prior month, according to the Labor Department’s latest producer price index data. On a year-over-year basis, the surge was more than 80%. The figures come as food costs have been rising at unprecedented levels, cutting into consumer wallets as families recover from the global pandemic.
Chart That Caught Our Eye
Analyst Team Note:
The mortgage payment for the median new home sold in the U.S. during October 2022 would now consume nearly half the monthly income of an American household earning the median income…
We want to take a moment to thank Interactive Brokers for being one of our Channel’s trusted Partners and to inform my audience of the special features they have given that our online friends here closely follow Chinese Internet stocks (BABA/Tencent).
Much of Larry’s audience is concerned about the US ADR issue of Chinese Stocks being delisted.
