Last updated on 2023-04-11
Homebuilders, Biotech, HyperGrowth, China – All are on sale right now. We may not yet be at bottom, but we cannot be too far away from it.
If the fed can get inflation under control without real mortgage rates above 6%, I think there is a soft landing and a quick recovery after a mild recession. If inflation spirals beyond that, I think it could get ugly.
However, listen to people gripe about the cost of gasoline, groceries, housing, rent, and cars – I have to think that people will begin buying less by choice and out of necessity. If inventories grow ( see here), then I think inflation will slow and the main concern will be the reduction of the Fed’s balance sheet too fast – causing recession.
But more pain could come and the market could be messy in the next few months with all of the uncertainty from Ukraine/Russia, supply chain issues, slow growth in China, inflation in the US and other Western countries. . .
For now, I will watch for a bottom in homebuilders, biotech and growth stocks. And I will deploy money AFTER the bottom has formed.