September kept up its reputation of worst performing month for stock markets (October gets the bad press due to major crashes but its not even in top 3 worst performing months). Why Sept? It could be a good topic for Behavior Economics PhD - I am sure someone must have done some thesis on this. S&P fell by 4.9% while Nasdaq fell by 5.9%. While markets are still meaningfully up for the year thanks to performance of Magnificent Seven (new combo post FANG), what's in store for last quarter of 2023? That would mostly depends on two factors - direction of inflation and interest rates. And continuation of AI momentum - sizzle or fizzle? For today, let's focus on first factor. Fed Chairman Powell's in-famous comment about "Inflation is transitory" caused major credibility loss for Federal Reserve. Since then Fed is doing everything to make sure that markets get the message that they are serious on bringing down inflation. Based on latest readings they are reasonably
Commentary about markets and investment ideas and some random thoughts!