Well yesterday was ugly.
A lot of it was caused by an almost 1% gain in the Dollar but that was caused by AWFUL Consumer Confidence numbers (98.7) while, at the same time, Fed Pres Williams said he expects rates to be 3.5-4% next year and thinks 0.75% would be appropriate at the next meeting. So stagnant Economy + Inflation = Stagflation – and that's not a good thing.
Goldman Sachs FINALLY realized earnings expectations for 2023 were likely overdone – especially in light of higher interest rates. Fortunately, at PSW, we've been taking higher rates into account all year in determining which companies to invest in so our selections should do very well as GS sends their High Net-Worth Clients running for the safety of low-debt stocks.
When the market is reacting to news that isn't news to us – we see it as a buying opportunity but FIRST we increased our hedges (SQQQ in particular) – as we did not like the display of overall weakness we saw in the indexes yesterday. We're going to give them a hall pass due to the pop in the Dollar but not a lot of slack. We had planned to hedge more into the holidays anyway, this just hastened our plan.
One saving grace to the sell-off is it came against low volumes – so what is done can easily be undone but we're going to need some good news and all we have this morning is some depressing Q1 GDP data (-1.5%) and BBBY just announced they are getting rid of their CEO (as if that will help) as sales were down 27% – because who would have thought that cutting back on coupons while the customers were suffering from inlfaion would not work out well??? Mark Triton has been with BBBY since 2019 and, before that, he was the CEO of TGT – so you'd think he'd have a clue but inflation makes fools of us all, apparently.
You can now buy BBBY, which also includes BuyBuyBaby (but who's having those these days?) for Just $500M at $6.50 per share and they do have $7Bn in sales but that's dfown from $12Bn in 2019, when Triton took…
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