Almost everything is expensive now. This is why Warren Buffet is not doing well because he can't find any "value" to buy. He won't buy TSLA, FB etc. He probably already sold his Apple and Google stocks. He would do well with his utility and infrastructure stocks.
Coiled spring? Not really. Look at the employment numbers. Most of those are low wage jobs. A lot people have decided to retire early, or stay home to have their own businesses. This is why we have "help" signs at many places. As for that truck contractor, he gets business because some other truck contractors have been out of business with the extended covid lockdown. A lot of things are expensive now. Cars, trucks, water heaters, air conditioners, refrigerators, etc. Stocks went up with the $1T infrastructure Bill. That is for several years or many years. It won't have much near term impact. Also, you can't just buy your "growth" with borrowed money. This is exactly what Senator Manchin has been talking about. You borrow money to mortgage your future growth. Then you take money away from corporations and some wealthy people for the infrastructure and social spending. You "growth" and "strong economy" is just self-fulfilling. Or it is "fake" in general. The net impact is really zero. It is like robbing John for the benefit of Mary.
It's a huge coiled spring. That's why things are heating up so damn fast. Supply can't keep up, and when it does, caa-boingggg. You're letting your political views fog your investment views. Here's the reality.... our economy is strong af. It's not open to debate. I mean unless you live in bum-f*ck egypt, take a look around. And there's just as many 6 figure jobs unfilled as there are minimum wage. The reason you only see help wanted signs for minimum wage stuff... is because people don't use help wanted signs for 6 figure jobs!! The friend I mentioned, he's a commercial builder, not a trucking contractor, but whatever. He says he's busier than he's ever been and he's dictating the price of jobs. Said developers are signing contracts without thinking twice. Your cars, refrigerators, blah blah blah... yeah they've gone up, but they're still selling aren't they? When supply picks up, durable goods will drop. It's no different this time around. Can't buy growth with borrowed money?! Sure you can. That's why commercial banks exist, to lend businesses money to grow. The government being the bank is no different, albeit the money needs to be spent wisely, that's always a wildcard lol... but roads and bridges and windmills and the grid... those are real jobs. Those jobs enable folks to buy houses and everything else. Now I'm not real keen on this ongoing shut down of our domestic energy sector, but DC will get the hint and it will be fixed. That's self-induced so it is definitely "transitory". So, we'll see I guess. But going back to the main point of the thread, pretty sure the banks are drooling at the prospect of higher rates. The Fed raises rates to cool an overheated economy. Banks charge more for loans, they make more money. An overheated economy is like a cast iron skillet you remove from your stove, it takes awhile to cool down. While it's cooling it's still to hot to handle, but the banks get to charge a lot more for their wares. Profits go up. So looking out several quarters here, if the Fed raises in December, the XLF should be at or above all time highs.
Risky. XLF just failed to stay upon the upchannel upper border 3days in a row. Not too bullish I guess.
Yes. The XLF and FAS have not moved much at all with the higher interest rates. With the negative net income, the future is dim. We still do not earn enough to fend of the high inflation.