And this week (shakes magic-8 ball) the stock market will start up! The financial news sites are all going with: because oil prices are rising.
I keep telling myself I won’t write any more posts about the stock market volatility that’s going on right now, but it’s hard not to when there are so many stories out there telling you why now is the time to buy, or now is the time to sell, or how there is a recession coming, or how there isn’t, and, “Hey, squirrel! Let’s sell and buy!”
Today. the U.S. stock market happens to be up. The Dow is up over 200 points, or 1.38 percent. It is still down for the year, but don’t look now, another week or two like this, and we’ll be right back where we started in January. What do they say, “A lot of sound a fury signifying nothing?”
As always, daily volatility tends to be a function of computer trading algorithms rather than actual investor sentiment. The truth is that things are still dicey. The Fed doesn’t know if it should or should not raise interest rates again… sooner or later….
For extra fun, the inflation numbers look particularly bizarre. Inflation, overall, is technically down, but it is almost all down because of falling energy prices. If you take those out of the mix, then maybe there is some inflation hiding under there after all.
The good news is that employment looks like it is both solid and real. That doesn’t mean there is no improvement to be had, but it does mean that there is little reason to worry that the employment numbers will suddenly reverse or be revised majorly downward.
Here is the wild card that I see coming: tax season.
There weren’t a lot of changes to tax law this year, but there were a lot of people who changed jobs mid year. For those that moved up, that might skew their income taxes toward smaller refunds (or having to pay) which could suck some money out of the economy. On the other hand, there are still plenty of people out there carrying forward losses, so that could mean bigger refunds for some.
Either way, long-term strategy is unchanged.
Mid-term strategy is starting to form up, and probably in the good direction. Hopefully, the news out of the crazy election cycle won’t skew the whole thing.