The New Year it's 2023!

January 2 2023

Weekly Column with The Contrarian

Happy New Year's Everyone!

On Friday a key facility the Federal Reserve uses to help control short-term interest rates saw record inflows on Friday, the final trading day of the year. The Fed said that its reverse repo facility took in $2.554 trillion in cash from money market funds and other eligible financial firms. The previous record was this past September with inflows at $2.426 trillion. That's $5,000,000,000,000.

Like The Contrarian says, Follow the money! The money flows in Sept. and now Dec makes me believe that 2023 will be another risk off year. Last spring all it took was Fed Chair, Jerome Powell Stating Inflation is enemy # 1 and aggressive interest rate hikes will be necessary to bring inflation down.

The Dow down 8.8%, S&P 500 down 19.4%, and Nasdaq down 33.1%, in 2022.

And these represent conservative risk assets. Also, It is easy to convert to cash. Liquid Asset.

Existing -Home Sales fell for the ninth straight month and declined 5.9% in October 2022. Hard Asset, Non- Liquid Asset.

December number will be out later this month. This week we will see the latest reports; ISM, manufacturing index for Dec. Also the FOMC minutes will be released on Wed. On Friday U.S. Non- Farm Payroll. (monthly unemployment report). The first week of the year usually sets the trend for the rest of the year. That's what they say! The Fed will remain hawkess and frustrated with high secular inflation. This year raw commodities prices will continue to stay high with China's economy reopening and conflict around the world only getting more intense.

I remain bullish, Energy, Metals, Defense Stocks.

Cryptocurrency is a high risk/high return currency. Not in 2023.

With a good risk free return from Government debt, cash is flowing to safety.

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.