BTFD or RFTH? No-One Knows.

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Market On Open, Monday 9 March

by Alex King, CEO, Cestrian Capital Research, Inc.

I for one have been surprised at how little stocks have been hit by the war in the Middle East. Possibly this is simply a cost-of-money issue; until the inflationary impulse from the oil price makes it into the cost-of-funds, the damage to equities will be muted. That there will be an inflationary impulse is beyond doubt in my view, since oil is in everything; whether it matters depends on what the Fed and the Treasury do about it. If I had to guess I would say that both parties treat the coming inflation as transitory and if they do, then we have a buyable dip at present; if they clamp down on inflation with the tools used in 2022, then even if the war settles to a lower level of activity, markets are in for a slow move down.

Let’s go see where markets stand.