Fed’s Balance Sheet Bingo

Two American banks failed. A few more – including a pretty big international bank, Credit Suisse (NYSE: CS) – weakened to the point that action was required. So the powers that be – ie the Fed, the Treasury and other banks – have stepped up to offer a backstop intended to assure account holders that they don’t need to pull their funds out.

Accounting vs. Reality

You know what makes me nervous? When everybody is saying don’t be nervous… And that’s where we are in the aftermath of Silicon Valley Bank failure. Yes, depositors have been made whole, equity and bond holders are mostly wiped out. And all the analysts, strategists and economists are out there saying don’t worry, there’s little risk of widespread problems in the banking system…

Powell’s Silicon Valley Prayer

We have reached the point of the Fed’s rate hike campaign where things are starting to break. Yesterday it was the Silicon Valley Bank (NASDAQ: SIVB) that “broke” – account holders pulling their money out of the bank to the point that the bank said it needed $2.5 billion in cash right away to stay afloat.

Today’s Trading Plan March 8, 2023

I turned the TV on just after 10 am yesterday to watch Fed Chair Powell’s annual appearance before the Senate yesterday. It was a shameless display of self-serving Senators grandstanding to reinforce the entrenched beliefs of the various constituents that voted them into their lavish positions

China Fights Back

A response was inevitable. China couldn’t be expected to just stand by while its economy took a punishing bodyblow. It had to counterpunch. I’m a little surprised that it took almost five months. But China has made a move to solidify the position of EV makers and battery makers in its home market…

EVs, China, and The Fed

I recommended electric truck maker Rivian (NASDAQ: RIVN) back in early January, shares were trading $16.50 to $17.50. Rivian has four things going for it: good truck, plenty of cash, long-term deal with Amazon and an expected 200% jump on revenue for fiscal 2023.

Great Expectations

As you are no doubt well aware of by now, I look at the stock market in terms of “windows of opportunity” for trading purposes. It is often said that the stock market is a discounting mechanism. That is to say, investors and traders try to account for as many variables as possible, assess what that means for the future, and then apply all that to stock prices.

WWWD? (What would Warren Do?)

We’ve talked a lot about the rising tensions between the U.S. and China. That spy balloon floating across the continental United States certainly didn’t help smooth any of the animosity between the two countries…

Moving the Goalposts

On February 2, I told you that a window of opportunity for stocks to move lower had opened. There were a couple reasons I thought that the bullish mood that carried the S&P 500 10% higher during the first month of 2023 might be souring.

Growth That Matters

We all like to see the stocks we invest in move higher over time. So we seek out companies that are growing, that sell more products from one year to the next. Because companies that sell more, well, that’s the best way to make sure you’re benefiting from the rising revenue and earnings that typically lead to higher stock prices.