Inflation intensified. The current CPI hit a 40-year high and will continue to rise. Meanwhile, the PPI, a proxy for future inflation, posted its biggest rise on record and is likely to continue rising.
The Fed's second rate hike is on the verge of early May, after Powell publicly said he would raise rates by 50 basis points and possibly shrink its balance sheet.
At the same time, the yield on the 5-year treasury bond reached 2.79%, and the yield on the 10-year treasury bond reached 2.77%. Yields on medium-term treasury bonds and long-term treasury bond yields are inverted.
This is a red flag for capital markets. Judging by the recent market reaction, the rebound in late March may have simply created an opportunity for Wall Street institutions to flee. Because Wall Street institutions have long known the Fed's movements, many Fed officials in history came from Wall Street.
The future market situation is not optimistic. Fortunately, I closed out all my long-term stocks late last year and now have very few short-term investments.
What kind of stocks would you rather invest in if the market fell sharply? What is your first choice stock?
My second choice is GOOGL. Google has strong competitiveness in search engine, Android system, YouTube, etc., while constantly expanding new business;
My third choice is a semiconductor chip company with an absolute moat, I'm still screening, maybe the NVDA/AMD one.
Anyone wondering what my first choice is? In the comments section, we will tell you.
Can you tell everyone what your choice was and why?
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