WC-11/21: Nothing Matters Anymore...
The next big catalyst is probably December 15th, or whenever the Fed begins tapering. Otherwise, the news is just noise and we're sticking to industry-specific stocks that relate to our catalysts
Preface: Thanksgiving week is usually chill
Consequently, there isn’t much to report on this week. Our Catalyst Calendar hasn’t changed and, to be extremely blunt, many economic reports and things we’d consider to be catalysts aren’t worth putting on the calendar.
The next big catalyst is December 15th. Want to know why? Here’s a hint.
Watchlist
Not in a place mentally to release this.
Catalyst Calendar
It’s Thanksgiving week so everyone’s trying to chill. Nothing important is going on for reasons we’ll explain below.
Opinion: Broader Market News Is Useless, Nothing Matters Right Now
There’s no point in looking at the market right now. Everything’s going up for reasons nobody can explain, and it’s getting out of hand.
The Message: Focus on News Specific to Your Stocks’s Industries, As Broader Catalysts Are Mattering Less and Less
Not too long ago, it would take forever for the market to recover from crashes and negative catalysts. In 2000, it took the market about 2 years to officially “crash”, and then another 5 years to recover back to all all-time highs.
Over the past year of writing about market catalysts we’ve learned that the general news generally says nothing useful about today’s market. This might seem obvious at first, but it’s worth thinking about.
Evergrande, the debt ceiling, supply chain BS; the market has bulldozed all of it faster than it used to recover from catalysts of similar magnitude. And increasingly so. As a result, it’s not clear that anything — yes, anything you see on the news or general market catalysts — matters anymore. Sorry, I’m just a little frustrated by this.
Look at the performance of “the market” vs. non-partisan “breaking” news over the past 2 months.
First, look at the market (proxied by the S&P) over the past two months. Over 7% increase. Wow! Amazing! (Sarcasm)
There’s also been a lot of news that you’d think would make it negatively volatile… but it didn’t.
So far in November, it’s been Fed-related stuff, political stuff, and supply chain worries that might make you think that market might plummet soon:
The Chamber of Commerce is alleging that the new Federal Trade Commission, chair Lina Khan “is overstepping the agency’s legal authority”, whatever that means.
Joe Biden could make the Federal Reserve more hawkish. Hawkish means they focus controlling inflation as a primary goal of monetary policy.
Brazil, Evergrande, Crypto, and a few other popular nouns are just news, not really catalysts.
Nothing happened in October:
A general summary of October broader market catalysts, per Axios, are the following:
International Monetary Fund problems or something
Energy crisis in China and the U.S.
… and a bunch more I’ve learned I don’t need to read from Axios Markets
This isn’t a slam on Axios Markets, or Axios. They’re a great outlet for non-partisan news, especially financial news. This is my aggravation with the market; nothing matters, and at this point everything feels like noise.
So what the heck is going on!?
At this point, it’s not obvious what will move the market.
We’ve reached an information saturation point in the market. There isn’t anything any significant subset of corporate finance-oriented economists, analysts, pundits and/or YouTubers can even remotely agree on that will “crash” the so-called “market”.
We’ve heard about supply chain issues, and it seems clear that those will eventually pass over; i.e. there’s no consensus that they’ll last into 2023. They’re part of the “transitory” category of inflation factors. Other issues include the Fed’s tapering plan and actions, which apparently have been “priced in” — whatever that means — along with Covid Lockdowns in Austria, China’s economic shakiness, and something-something Evergrande’s debt tied to a nexus of global wealth.
M&A, IPOs, and Deals
There’s nothing dude… nothing.