As the global economic landscape continues to be shaped by the pandemic, the markets remain volatile. In this 02-24-23 issue, the market corrected this past week as the recession countdown clock started as yield curves begin to trough. A recent Wall Street Journal article exposed how retail traders that made millions during the pandemic trading the market are now wiped out.
The corporate bond market, like the stock market, shows very little concern of higher interest rates or growing odds of a recession. With this in mind, let’s look at some important investment advice for navigating market volatility.
Natural gas prices are down nearly 75% since last summer. Sitting at historical lows, does seasonality argue for a long position? The answer is no. Prices are likely to remain low due to the abundance of natural gas, and potential for oversupply in the market.
Don’t be fooled. Current data reflects an economy returning to normal which doesn’t rule out the risk of a recession. While the markets may appear to be bullish in the short run, investors should be wary of potential risk in the future.
Gold investors are not betting on a government default but on the continuance of the Fed supporting governments to continually run deficits. Gold prices are likely to remain steady, with little upside as the Fed has been clear about its intentions to keep interest rates low.
Bullish bets are mounting on a ‘no landing’ scenario, where the economy avoids a recession entirely, but that runs against the Fed’s goals. Investors should be wary of the potential for a recession, and position their portfolios for the long term.
In this 02-17-23 issue, the market corrected this past week as the bullish narrative of ‘no recession’ clashed with Fed intentions. Investors should take the time to evaluate their portfolios and make sure they are adequately diversified and prepared for the potential of a recession.
Don’t look now but the once battered crypto currency market is up nearly 50%, in line with many assets shunned in 2022.0. While crypto can provide a great opportunity for investors, its volatility should not be underestimated. Investors should consider the potential risk and rewards before entering into this market.
In summary, the market remains volatile, and investors should consider the potential risk and rewards of each investment before entering into it. Natural gas prices are likely to remain low, while gold prices should remain steady. Bullish bets on a ‘no recession’ scenario should be taken with caution, and crypto currency investments should be evaluated thoroughly before making a decision.
