INVEST

 

 

 

  A massive amount of commercial real estate loans will come due in the next three months. Inflation is almost entirely being driven by housing and energy at this point. We face war in Ukraine and Israel. Sales of big-ticket items like cars cooled rapidly in the last few months. Credit conditions tightened from the April banking crisis. There’s a real possibility of a government shutdown. Going back to our feedback loop analogy, the estimated length for a rate hike to hit the economy in full is roughly 18 months. The first interest rate increases started in March 2022, roughly 20 months ago.

 

  Democrat-winning years actually tend to drag the returns down. Including 2020, the average return during Team Donkey years is 8.4%. When Team Elephant takes it, returns jump to 15.2%. With this in mind, we can potentially, kinda-sorta predict who the next president will be based solely on S&P 500 performance. Say the S&P jumps 10% before election day next year. That’d be a pretty good signal that Republicans are set for victory. Investor confidence would be speaking loudly in their favor. If we put in a number something shy of that, say 6%, we might want to start banking on an incumbent win.

 

 

 

 

 

 

  Money supply dropping

 

  Of the other precious metals, platinum was up 2.9% while palladium fell 3.2%.   Oil was the big winner, along with the commodity ETF. Gold YTD: Steady as She Goes To the surprise of some investors, gold is up 3.2% year-to-date. You’ll notice that both gold and the US dollar are up on the year. This shows a rising dollar is not always negative for gold and that at times they can both rise together.