April 8, 2022
Good morning,
European equities rallied +1.8% in the early part of their last trading session of the week. They have drifted just off their daily peaks as the sun rises on our shores. Bonds are quiet for a change this morning. It looks to be a quiet Friday here, at least when it comes to U.S. data, unless one considers Canadian payrolls as a point of interest. There isn’t anything else. For a very turbulent, for some a painful, week in fixed income, U.S. equities, by S&P terms, are off only ½ a percent (~50bps) if the market closes this afternoon where Futures are trading this morning.
With little other action to speak of, let’s recap where we think we are market-wise. We have had some breadth thrust buy signals, a long period of short-term extreme pessimism, a crisis event to shake out weak hands in the market, and interest rates not yet high enough to bite stocks. So, the short-term outlook gets the benefit of the doubt. Longer-term, absolute valuations leave one still seeing high risks. But you know there is only one absolute certainty long term – so long term predictions, as uncertain as they are, don’t have a large role in current investment decisions.
Hope you have a great weekend.
Be well,
Mike