The Fed and Trump are stepping on the economic brakes with one foot with the other foot on the gas of supply side economic policy. We’re seeing smoke from this friction in the stock market. Something is going to give way. Soon the trend will falter under the combined weight of a trade war and rising rates or we’ll turn away from policies that are dragging down the economy.
There’s a saying that the market takes the stairs up and the elevator down. Last year felt like an escalator and this year we’ve taken the elevator down twice. This week we’ll look at the mechanics of downside momentum, the health of the long term trend, the bounce and where we might go from here.
In last week’s video we discussed the potential for short term volatility and examined the long term trend. The market is in a bit of an air pocket as we wait for the start of earnings season with little to focus on other than rising rates. In this video, we’ll take another look at a likely path for the markets in the short term and take another look at the long-term trend. We’ll also answer the question, Will Rising Rates Sink the Stock Market?