Option Professor-Stocks-In 2023-There Are A Lot Of Different Ways Things Could Go-A Must Read!
December 17 2022 Option Professor Observations & Opinions
With the Holidays upon us (we’re off to Turks & Caicos); this week we are going to be brief/to the point.
In 2023; we could see the labor market ease and the judgements by the Fed may lead to a more accommodative policy. This would take pressure off multiples and help stocks. China’s reopen could be a nightmare health wise (many people ELECTING to not leave their apartments are infections skyrocket). The consumer may have enough gas in the tank to take us thru Q2. In this case the recession is pushed back maybe to 2024. POPULAR opinion is bad first half great second half (how did you accounts do this year following the mouthpieces you followed??). The Fed can’t forecast exactly/Neither the knuckleheads who tout and charge lots of money and give lousy picks and lose money and tell you to hang in there ect.
The second outcome could be China is OK by summer and they bid up commodities like energy, gold, industrial metals, agriculture. This would be a nightmare for the Fed if China boosted energy & food inflation maybe pushing Fed Funds thru 5%. Also; EARNINGS have not been cut and the way the consumer is spending with credit cards; we will see if operating leverage is hit by costs as revenues may be up but margins pinched. Employers are not too keen to cut people knowing it’s hard to get them (rate is 3.5% and 1.7 to 1 avails to seekers). If earnings go to 2.00 or less on SPX & we get the Fed Funds above 5% then the P/E could get 15…that’s how you get in and around SPX 3000. We’ve had reversion rallies in the Dollar & Yields and if they end and we revert back to higher Dollar & Rates. To us; the markets look like drug addicts seeking cheap money & even the hint/rumor the Fed will give them; the addicts go nuts.
In 2022; We feel we’ve had a good grasp on what sectors to be in & how to roll short term Treasuries. If you chased silly hype artists and dubious forecasts; It’s time to hear us out and include us & our opinions.
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Happy Holidays
The Option Professor
Remember All investing involves risk of loss and it is not right for everyone. CONSULT YOUR BROKERAGE FIRM to determine your own risk tolerance and suitability. Past performance is not indicative of future results. Information and opinions are provided for informational purposes. It is NOT advice.
