Ignore the Noise

-

 

Ignore the Noise

World Economic Forum: The global elite gathered in Davos, Switzerland, last week for the annual debate about ESG investment policies and worldwide fossil fuel usage. The forum was particularly interesting this year, as the definition of ESG continues to be redefined with both the NASDAQ 100 and S&P 500 adding energy companies.The World Economic Forum also debated global trade, which was probably a heated discussion with many companies starting to return to more domestic suppliers due to global supply chain glitches. Now, local sources may be more expensive, but due to safety and security concerns, supply chains are now less global than a couple years ago.Beige Book Survey : Ahead of next week’s Federal Open Market Committee (FOMC) meeting Wednesday, the Fed released its Beige Book survey last week. Six of the 12 Fed districts reported no change or a slight decline in economic activity. Five Fed districts revealed slight to modest growth, and one district reported a significant decline in economic activity.Interestingly, the Beige Book survey stated that most Fed districts benefited from a slight increase in consumer spending during the holidays. That doesn’t exactly add up with the dismal retail sales report for November and December.That is one of the big problems with the data that the Fed receives – it’s clearly a bit behind the latest economic data.Record Crude Oil Demand : The International Energy Agency (IEA) expects record worldwide crude oil demand this year, due in part to China reopening its economy for international travel. The IEA expects crude oil demand to rise 1.9 million barrels a day and reach a record 101.7 million barrels a day. This increased forecast comes on the heels of OPEC and its allies (including Russia) boosting their output by 4.7 million barrels a day in 2022 – and then abruptly cutting production in October.New global crude oil production is forecast to rise by one million barrels per day, thanks to increased output from Brazil, Canada, Guyana, Norway and the U.S. As a result, the IEA expects very tight crude oil supplies and higher crude oil prices in 2023.


We are having a workforce that wants to travel and enjoy themselves after being locked up for a few years.  Summer will be a time of rampant enjoyment around the world.  H2 will be a great year which will be played out in EOY earnings reports.

Comments

Post a Comment

Popular posts from this blog

All six cylinders are working - Good Outlook

-
Image
 All six cylinders are working - Good Outlook And in 2022, trade between the U.S. and China reached record levels. Shipping rates, another measure of trade activity, have improved over the past couple of years. As the world emerged from the COVID-19 pandemic, shipping rates plummeted. Since its peak in September 2021, the WCI Composite Container Freight Benchmark rate has been down 80%. And global supply chains are nowhere near as strained as they were during the pandemic. Russia tensions will be less or gone in H2 China will replace Russia as the naughty Man of the world.
Read more

The Industrials Sector Index Fund $XLI

-
Image
  The Industrials Sector Index Fund $XLI   During this bull market in particular, the one that turned 8-months old earlier this week, Industrials have been a real leader. The Industrials Sector Index Fund $XLI is the best performing sector of them all since the June lows. Now take a look at Industrials on an equally-weighted basis relative to the S&P500 equally-weighted. From a broader perspective, Industrials are breaking out to new 14-year highs relative to the rest of the market: One thing we know for certain is that new 14-year highs are not something we see a lot of in downtrends. This is a group we want to continue to own. It's not anything new. We've been all over this theme since it started to develop last year. Here's Deere $DE for example pushing up against new all-time highs attempting to break out of this massive base: Are you fighting these trends? I can't imagine why you would. There is more sector rotation and emerging leadership taking place in this ...
Read more

February Hangover.

-
Image
  February Hangover . The November through January period is historically the most bullish 3 months of the year. And then comes the February Hangover. We're in the middle of that right now. Look at the average performance of every February going back to 1950: And remember, this is the most bullish quarter of the 4-year presidential cycle. Of the 16 quarters in the entire cycle, the one we're in is historically the most bullish.
Read more