06182021 :: Friday finance

A partial digest

Philip Valenta, MSF


Many markets did not fare well this past week, the DOW and gold in particular. Premature bets continued to be placed, which is to say that many people, traders, investors, however we refer to them, have been gambling, far and wide. Meme stocks and crypto and social media users get so much attention, yet there is actually very little separating folks at this time, including the “smart money” (which rarely looks that smart anymore, if it ever did).

There are many different groups, including the group that made the premature bet that the Fed would be forced to raise rates much sooner and more often than twice in 2023 in order to contain the inflation monster. Then, there’s the group that would have made the premature bet that the Fed wouldn’t raise rates until at least 2024, after all. Both would now be thrown off by the Fed’s new guidance of adding two hikes to their 2023 forecast.

What can be said is that deep pockets have tended to adjust quickly to developments. Therefore, the different camps out there will come around, money will move, new positions will be taken. Let it be done.

Understand, though, that what the Fed has said as a unified body that is not actually unified did not materially change the economy’s prospects, nor the labor market, nor the literal or figurative fortunes of…