Happy new month! Should I just keep regurgitating a lot of things that I have been spewing on and off here? The year is slowly drawing to a close. Some of my clients and partners are even more quickly disappearing off on holiday – how lucky. I have started working on my New Year letter (packed with “wild predictions” for 2025) and other reports for some clients.
Oh, you just sold all your stocks or investment funds in panic and then ran to the bathroom and locked the door for a couple of days. Wonderful because you could buy back at higher prices once the panic is over. Nobody in the world has it all. The short-term correction is always going to happen.
Bulls and bears are always battling it out in the market and it is important to maintain a big picture perspective. Panicky buying and selling will always occur because of human nature. Should I pick up my ball and go home? Nobody is going to kick the bucket. A little surprise usually does more damage than something big that has been in the news for months.
What could possibly go wrong? The world got a sneak peek of “The Donald 2.0” administration, as the President-elect announced plans to slap a hefty 25% tariff on goods from Mexico and Canada. For added spice, he is cooking up a 10% surcharge on products from China. I suspect that some policymakers underestimate the extent of global integration in our brave new world.
Meanwhile, traders were treated to a buffet of economic data just in time for Thanksgiving. Among the highlights was an unrevised Q3 GDP growth along with October’s core personal consumption expenditures price index, affectionately known as the Fed’s inflation BFF. The numbers came in a bit too hot, suggesting inflation might be sticking around longer than that one guest who refuses to leave the Thanksgiving dinner table.
Adding to the fun, the Fed’s November meeting minutes revealed policymakers are pondering a potential pause on rate cuts assuming inflation does not decide to crash the party uninvited.