Things that make me go Hmmmm
In light of the current market volatility, I thought I would provide some market soundbites. In no way are these meant to be recommendations, they are simply areas that I pay attention to and things that, recently, are making me go hmmmmm.
As of January, markets have experienced some of their worst declines since 2020; Nasdaq is down 21%, Dow Jones down approximately 11%, TSX down approximately 3% and the S&P is down 14%
According to a recent CNBC poll (US), 80% of small businesses see a recession. Small business employment shed 105k jobs in the past three months; small businesses are the largest employers next to Government.
Both the US and Canada have begun to increase interest rates which appears to be having a cooling effect on home sales https://storeys.com/canada-home-sales-falling-largest-markets-rbc/
Mortgage rates in the US have hit 5.27% the highest since 2009
Existing home sales fell approximately 3% month over month. It is the second consecutive month of decline. A trend or a a sign of the increased mortgage rates and loss of purchasing power due to inflation rise.
Of the 73% of the S&P companies that have reported earnings, 80% have reported an increase in earnings.
US Inflation rate tops 8.5%, highest since 1981 and in Canada 6.7%, the highest since 1991
Do I feel markets are telling us something? As a 30 year investor, I absolutely do. Markets are leading indicators and have a tendency to price in favorable or unfavorable environments very quickly and based on current data, it's got my attention. SME’s will need to adjust for their rise in costs, which is inevitable, and that ultimately results in downloading costs to the consumer. The question then becomes, how much is the consumer willing to pay or do they retrench?
