This is no time to panic. This is a superb time to look for opportunities.
• The auto sector cannot sell cars built for a different era.
• Airlines are struggling under the heavy weight of rising oil.
• The housing sector is in shambles and no end is in sight to its dreadful decline.
• The financial system is trying to regroup with bank credit slowing down in a worrisome way.
• Employment is declining and rising unemployment claims point to more weakness ahead.
• Industrial production is slowing down in response to a consumer overwhelmed by rising inflation.
Poor business conditions create the environment needed for the next up-leg of the business cycle. Interest rates decline (it already happened), commodities weaken (industrial commodities show a decline in the past 12 months), crude oil will eventually decline and stabilize at lower levels, and inflation will decline (this still has to happen).
In this transition long-term Treasury bonds usually do well, especially in summer.
The business cycle is alive and well and provides superb investment guidelines.
More, much more when you subscribe to The Peter Dag Portfolio on https://www.peterdag.com/.
George Dagnino, PhD
Editor, The Peter Dag Portfolio
Since 1977
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