Another day, another all-time high but barely. The market moved up amid warnings of airline cancellations across the country due to Covid. On Monday, I mentioned that there would be self-imposed lockdowns due to fear. This is clearly happening now with travel. There is now a high risk of Covid breakouts as schools begin to open. So there will be some negative effects due to Covid again but is it enough to cause additional economic slowdowns?
Inflation, while temporary or not, it is causing higher prices. As long as wages are moving higher in tandem, it cancels the effects. Today, the CPI report showed that inflation is moderating, which means not moving higher at the same pace as previous reports.
The market has clearly been shrugging the underlying issues that may cause economic slowdowns ahead and there are typically several walls of worry that the market works through. But there is always some catalyst that will ultimately change sentiment. This happens when there is a fair amount of complacency. I think we are there but it is the market that will make that decision, not me.
Founder | SimpleOptionStrategies.com
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