What to Expect in The Stock Market (September 27-October 1)
... Hope you already got all your holiday shopping done
Necessary Man United update. Sorry for all those who don’t care
(Should I put this at the bottom? Let me know in the comments or on Twitter, TikTok, or Instagram. See that masterful shameless PLUG. It takes skills to be this self absorbed. Okay Imma stop patting myself on the back).
Man U lost to West Ham during the Carabao Cup and then followed that up by losing to Aston Villa on Saturday. MAN U SUCKS!!
The Stock Market had a very WEIRD week.
The week started with September doing what September does and trying to paint the market red. On Monday, everyone was freaking out about a Chinese Real Estate company called Evergrande.
Oh you have never heard of them!
NEITHER HAVE I
Neither had 99.8% of the investing world until Monday when story broke that this Chinese company could cause another 2008 style Financial crisis cause they hold over $300 Billion in debt and were about to default.
Cue every comparison to Lehman Brothers
In the end, after all the flashy headlines and end of world video titles. Everyone realized that wait a minute this is not that bad of a situation and also realized that this is a REAL ESTATE COMPANY, not a complete financial institution that is tied into so many different parts of the economy.
Anyway by Wednesday, all the paint got washed away by words from Jerome (Papa) Powell that tapering might begin sometime “soon”. Which led the entire investing media world to assume that since Papa Powell went from using the word “thinking about” to using the word “soon”. It means that tapering will begin in November. Regardless this for some reason had the opposite reaction I expect and cause the markets to get back to party mode. Regardless here are the results of the week from the various indexes, indices, index? (Which word is correct?):
But you do not come here for what has already happened. You come here for What is TO COME. In light of that, I say I expect more choppiness in the Stock Market in the comings weeks and to close out September.
However, my predictions mean ABSOLUTELY NOTHING. The Market will do what the market does and we will do what we do. Which is continue INVESTING ON A CONSISTENT SCHEDULE.
Plus the interesting story is not in the Stock Market right now. The interesting story is all on the Economic and Political Stage. So lets to that way
Politics and The Economy
When you got Dr. Antony Fauci out here asking Congress to do its job and raise the debt ceiling. You know you got problems. He said,
“The worst time in the world we want to shut down the government is in the middle of a pandemic where we have 140,000 people a day getting infected and 2,000 people a day dying.”
So first question, The Debt Ceiling?
Well it was enacted during WW1 so spending could be done easily to support the efforts of the war without always having to get Congress back in session to spend money to keep the effort going. It has since stuck around post those wars as an easy way to get the Federal Budget done. According to Wikipedia:
… the debt ceiling is a limitation on the federal government's ability to manage the economy and finance system. The debt ceiling is also a limitation on the federal government's ability to finance government operations, and the failure of Congress to authorize an increase in the debt ceiling has resulted in crises, especially in recent years.
Re-read that last sentence, “the failure of Congress to authorize an increase in the debt ceiling has resulted in crises, especially in recent years.” That is basically the gist of the situation. Democrats in the House want to raise the Debt Ceiling so they can push through their various infrastructure bills and also to pay for current debts that the US has ($28 trillion worth of debt). Republics call Democrats irresponsible for the way they choose to spend money (doing a great job of forgetting that their tax cuts in 2017 play a role in why we are where we are). I pick no sides because to me this is like Adam and Even in the garden of Eden, they both just keep passing blame to the other and not taking responsibility for the part they played in getting us in the hole we are in.
The fear is that as Dr. Fauci said, the government will have to shut down beginning this week because an agreement cannot be reached. This would not be the first time either, remember 2018? I remember it very well cause I volunteered at a food bank and people, who normally would not be there, were showing up. Point is the government keeps using their actual constituents as bargaining chips and toying around with people’s lives like its nothing just so they can get what they want. It is extremely unfortunate to watch. And people wonder why believe in the government is at all time LOWS.
What Kyla explain the situation in detail in less than 3 mins:
This has a larger ripple effect on the economy. The US government plays a key role in mostly everything. Especially on the supply chain which is already at crazy thing margins right now. Think about if the government had to shutdown and then custom officers had to be let go. Meaning more issues at airports. Or custom officers at shipping ports had to stay home. Well even more ships get backlogged. Already, we have Nike calling for reduced revenue for the rest of the year due to supply constraints. Even Costco, is going back to implementing a few policies from the height of the pandemic and limit the amount of certain items customers can buy.
Basically, the squabbling of the old and dusty in Congress ain’t making things better. They gotta make moves fast and I expect them to do something early in the week.
Numbers I care about
Consumer Confidence Index numbers will be released for the month of September on Tuesday. We had Consumer Sentiment numbers earlier in the month and those were HORRIBLE. Horrible like decades low numbers. I expect it to remain horrible. I care about this number because people make up the economy. How people feel is a lot more important than anything else when it comes to the economy.
Home Price Index number will also be released on Tuesday. I care cause I am trying to buy a house and I need to know where I stand. Seems homes are not being built because materials constraint and worker constraint. DOUBLE WHAMMY!
I hope you all have A WONDERFUL week. On Tuesday, I will be releasing a podcast with the famous, @AdmaniExplains. Go subscribe to Rambling Mind Podcast so you do not miss it. I will have another post on Wednesday. You can also catch me on TikTok, Instagram, and YouTube everyday.
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Remember GENEROSITY > greed
God bless Each and Everyone of y’all
✌🏾
-Kelechi