Not too impressive.
Since we crashed the market last week by closing out some of our longs (in these low-volume markets – it doesn't take much), the S&P 500 has bounced back, but basically only on three sudden surges, on Thursday and Friday morningings and pre-market Monday. Other than that, the vast bulk of the action has been sideways now that earnings season is mostly behind us.
You can see why we took advantage to cash out at the top – it's hard to find buyers when you are selling more than a few shares and the S&P dropped 5% in two days last week – it doesn't take much to send these dominioes tumbling over. That's why Powell has a tricky job today (10 am). He has to mke his keynote speach for the Jackson Hole Conference which is being held on-line because Covid has made it too dangerous to hold a conference – even for a few hundred rich people in a luxury mountain hotel.
It's hard to say the virus is behind us as an economic factor when your audience just had to cancell a trip to Wyoming because the disease you are pretending is gone just spiked up again – past last year's levels (when the conference was also cancelled).
Meanwhile, the Fed minions are floating trial balloons about scaling back their monthly stimulus (tapering) from the current $120Bn a month because it has been jacking consumer prices up 10% – and that has been hammering down consumer confidence at a rapid level.
This week we've heard quite a few businesses begin to talk about inflation hitting their margins and giving more downbeat guidance moving forward. We've also heard new about shipping costs and chip prices increasing – the kinds of things that are not at all transitory and can have a cascading effect on the costs of other goods and services.
IN PROGRESS
