Back in Dec I called that the upcoming stock market rally would be a “Sucker Rally“, which would allow deeper pockets to off load their stock holdings. BlackRock’s Chief Equity Strategist Kate Moore called it a “Risk Rally” when she recently stated “A lot of the investors within BlackRock and around the street have been using the big rally in stocks as an opportunity to fade some risk, and rebalancing portfolios. I’d be hard pressed to come up with a segment of our clients that was buying aggressively into this risk rally,”.
Video is courtesy of the Sprott Media YouTube channel
The US Fed will be holding meetings for the next two days. They will continue to raise Interest Rates again this year. I’m just not sure if they will have a rate increase now or wait till later this year. The key excuse of raising Interest Rates is to fight Inflationary Pressure.
I have noted that Gasoline prices have stopped going down and IMHO have started to reverse back upwards. The price of fuel impacts the price of all goods sold, as those goods have to be transported. Raise the price of fuel and you trigger an increase in the Rate of Inflation. That theme was used last year to trigger Inflation Growth to help justify the increases in Internet Rates. It worked until it impacted the Stock Markets last December.
When Interest Rates are increased once more, that will imho trigger a Stock Market correction which will lead into a Major Recession. 2019 should see Stock Market and Economic changes of Historic Proportions.
Video is courtesy of the CNBC YouTube channel