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The BIG stockmarket bounce coming in 2019

No one has ever successfully predicted the stockmarket. But, looking forward a month or so, we can argue that many of the selling pressures of the last few weeks won’t be present. Hence, if sentiment changes and if buyers emerge, the market could actually go up.

Read on. Add a comment below with your thoughts.

Here’s a short list of what won’t be present:

1. End-of-year hedge fund redemptions.

2. End of tax loss selling for the year 2018.

3. End of uncertainty about the December interest rate hike by the Fed. It happened.

4. End of uncertainty about a government shutdown. It’s happened. History: Recent shut-downs have not affected the market (though I feel for the 800,000 innocent souls affected.)

5. News and confirmation of corporate earnings and economy slowdown. They will be lower and slower. We know that.

6. End of panic selling. Most has already happened. How much lower can Apple go? Or Berkshire Hathaway at $189? Berkshire is one stock I’ve held onto… Yuch.

7. End of Fed chairman Powell. There are strong rumors that Fed chairman Jerome Powell will resign, be fired.  or (get the message) and announce a temporary halt to rate hikes. Powell has been under huge pressure from Trump, who believes Powell has caused the stockmarket’s present crash, which could seriously affect economic growth and corporate earnings. (A buyer for an apartment I have for sale pulled out because of the market)

There’s clearly something going on at the Administration with Powell. The press is full of it.  The Fed is worried about inflation. The latest CPI came in at an annual rate of 2.2%. The Fed gets agita when it’s over 2%. But much of the 2.2% happened before this happened to oil:

There will be (and already is) a huge amount of cash available to buy shares. Investors might actually begin to think that share prices are actually cheap. And they are – compared to what they were in August-September.

In short, I wouldn’t buy anything until the New Year — and only after I felt more comfortable with the likely early end to the Federal Government shutdown, our Trade War with China and a halt to the Fed rate hikes.

For now, the best place for your money is our old standby:

While you’re thinking about what you should write in response to this column, check this chart out. It shows Fed rate increases and recessions:

Things to be happy for, as we move into New Year

+ Personal health. We’re still alive. There’s a lot of new stuff to keep us alive even longer.

+ The family. They still love us. And we love them.

+ Our brain. Perseverance and intelligence solves all.

+ The continuing onrush of useful technology — from smart door bells, to ever-faster laptops.

+ The Internet. It brings us news of far off places. Check out Shanghai in 360 degrees. Click here. It keeps us close to our family. Who doesn’t love FaceTime and Photostream. It helps solve our problems — like our squeaking laundry dryer and my irksome email client. And it’s allowing me to have fun writing this blog — despite being in the middle of nowhere.

+ Travel. I took the family to Botswana. It was fabulous. Next trip: The Galapagos.

HarryNewton
Harry Newton who’s enjoying the grandkids. Everyone is having a wonderful time, except for Rosie, who’s having trouble getting into the swing of things:

Don’t forget to send me your thoughts.

 

6 Comments

  1. Mike Nash says:

    My New Year’s resolution is to stop reading this worthless column.

  2. Bruce Miller says:

    Largest dead cat bounce ever… we wait and see.
    Happy Holidays any which way.

  3. Andy says:

    Two months ago you posted “Time for a little bottom fishing.” How’d that work out?

  4. Andrew Giza says:

    As one of those 800,000 federal workers no getting a paycheck I greatly resent your insensitive comments.

  5. Gary S says:

    Harry you might have more influence than you think. I noticed the market turned up as some as you posted this. Your ideas make sense so, lets hope so. Happy New Year to all.
    Regards,
    Gary