12:00 TUESDAY – Stock Market Report #144 – 12/14/21

by Robert Holman | The Defensive Advisor | www.defensiveadvisor.com

EQUITY MARKET RATING … Going to 6 (where 0 - 4 is bearish, 5 is neutral, 6 - 10 is bullish). The markets are just too erratic to be more bullish than that.

EQUITY MARKET and ECONOMY … Inflation, interest rates and Covid – these are the current drivers of stock prices. The stock market is certainly cooling off … will consumer enthusiasm cool off? Will consumer spending cool off too? Will inflation cool off also? What is happening with Covid?

Firm answers would resolve a lot of stock market worry.

There is some reason to believe that inflation data may be signaling a coming slowdown (meaning Nov. may have been the worst month for producer prices, which then means we should see the worst month in consumer prices shortly thereafter).

What happens when the shipping “crisis” resolves itself and we are flooded with consumer goods post-Christmas? Discounting and sales, i.e., lower prices?

It’s reported that we are seeing a rotation out of high multiple stocks into low multiple stocks – HOWEVER – over the last 6 months, the worst performing STYLES are Value (all 3 - Large Cap, Mid Cap and Small Cap) and Small Cap Growth. What should one make of that?

I know many people are concerned with taking the mRNA shots from Moderna and Pfizer? But, what about the non-mRNA shots (developed the old fashioned way) from Johnson and Johnson and Astra Zeneca?

“Investor worry” could be at its peak today and tomorrow as the Fed meets and decides on the future course of its monetary actions. They will probably release a statement on the degree of tapering and a discussion of inflation trends. They may talk about future rate hikes, but my guess is not much.

Really, there are more questions than answers right now, and a very nervous market.

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