The Land of the Setting Sun

December 21 2022

Weekly Column with The Contrarian

Happy Holiday's!! Today is the beginning of the winter solstice. The shortest day of the year. Really, it's the shortest light of day. Stocks and risk assets have the shortest Christmas rally to go until the end of the year. With little data until later in January and the Fed next FOMC meeting is not until early February the market has room to push higher. The S&P March contract reached my downside objective of 3818.00. ( actual low 3803.50 ). Today we had a rally to the 3917.50 level. With holiday markets here for the next few weeks expect low volume, low liquidity. Price swings are known to happen in this type of holiday market environment.

Big news yesterday was The Bank of Japan said it would change the cap for the interest rate on the 10- year Govt. bonds went from .25% to .5% rates quickly climbed .4% This is the first rate hike, but not the last. Japan is the last major country to raise interest rates in hopes it reduces the inflation risk.

China went from "ZERO COVID" to " RIP THE BANDAGE OFF"! People are dying in China. Manufacturing has stopped in major cities. China keeps lowering interest rates in hopes that the consumer demand will pick up after Covid lock down.

Bird Flu has been spreading throughout the U.S. Last death count was 40 million chickens and turkeys in a number of states. This has added to the higher cost to eggs and meat prices.

Ukraine President Volodymyr Zelenskyy Just was in Washington to pick up, Stinger Missile Defense System to fight the war. This is the last blank check congress will give going forward.

These highlight's heading into the end of 2022 keeps cash king for now.

2023 will pressure Risk Assets into the second quarter.

Safe Holiday's peeps!

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Any views expressed in the below are the personal views of the author and should not form the basis for making investment decisions, nor be construed as a recommendation or advice to engage in investment transactions.