Entering A Stock Picker’s Market Paradigm (Also, I’ll Be On TV Today)

I’ll be on Fox Business with my old friend Charles Payne today during the 2pm ET hour (likely around 2:45pm ET). We’ll mostly be talking about China/US tensions, the threat of Tik Tok, etc.

Meanwhile… it’s time to play the 21st century version of TVPoww. You yell at your screen “Powell, Powell, Powell!” and if you yell at the exact right moment, you win money!

As for the Fed/Powell and the markets, I’m not sure how most pundits seem to believe that the Fed is going to cut rates later this year and that that is somehow bullish for the markets right now. As I outlined back in December, I think the most likely scenario for the economy is that it will be steady or a bit weak while inflation is going to stay stubbornly above the 2-3% level that the Fed/Pow is targeting. The only way that the Fed gets all cutty in their meetings later this year would be if the markets and the economy are tanking later this year, with the market down like 20-30% from here. And even then I’m not sure if inflation will be low enough at the time to provide cover for the Fed to cut rates to artificially low enough levels to spur another Bubble-Blowing Bull Market.

Frankly, as I’ve been saying forever — wouldn’t it be nice for the Fed to leave rates somewhere near natural levels (right now that’s probably 5-7% or so) instead of constantly creating Bubbles and Crashes? That might actually be the paradigm we’re in for a few years. The end of the Fed Put Paradigm — where the Fed cuts rates to save the stock market whenever it gets too weak might be on hold for a few years at least — is here.

That would mean that we’re probably entering a Great Stock Picker’s Market Paradigm. Good stocks go up, bad stocks go to $0. That’s what happens over the long run anyway but the Fed’s constant distorting of our markets has enabled crappy/fraudulent companies (and cryptos) to snag/steal billions of dollars from the public in horrible misallocated capital ways. Let freedom (and free markets and natural rates) reign!

We’ll do this week’s Live Q&A Chat at 9am ET Thursday in the chat room or hit reply to this email.