Binoculars
Market is fwd looking. Global Quantitative Easing allowed global market recovery. Currently, more than 50% of global central banks are in tightening mode. Many Intl bourses rolled over months ago (Korea,China,DE,GB,HK). Dow theory states transports is leading indicator of slowing economy. FedEx, UPS, etc have had declining stock prices for months. From investor view, yes, FDX executed solid Q3 numbers, albeit EU/TNT was soft. More importantly, they cut fwd guidance. This (transports breakdown) agrees with fwd US macro pic and Fed raising rates and reducing liquidity from balance sheet (less money supply to loan...slower Econ) to control inflation, have bullets for next crisis.
QE was crack to get the party started. Less crack, bummer.
Pundits believe the 2-3 month market drop will persist at least another 3-6 months or longer. Statistically, it’s normal.
Pundits further believe Emerging Markets (EM) will rise before US as their down cycle lead ours down and should lead up. (Search Fidelity EM funds to be prepared if/when time is right).
Market movers:
Fed: If GDP deteriorates too quickly AND tame inflation, Fed will adjust by changing policy on reducing balance sheet (cessation of reducing liquidity), reduce rate hikes, or both.
Trump: Will not ease up on Trade War, nor should he. With IP theft and forced tech transfer, China should’ve been challenged decades ago. Ideas are our strength/weapons. Give it away, you surrender (economically, militarily, culturally). I was pleased to see 5 eyes countries supported condemnation on China this week. Germany, France will bandwagon.
Trump needs this situation to correct itself quickly or lose re-election. He’s unconventional/quirky, but he’s not dumb. This Trade tiff will erode his base.
China: The the biggest thorn in the paw. They’ve stole and forced tech transfer for 40+ years. They signed Treaties to stop/punish theft w/ no intention to enforce. It(philosophy) brought them from ag society to #2, faster than any nation in history. They told Nixon, they would open markets and play fair. This week, Jinping declared, “no one can demand we change.” (Can’t imagine who he was referring to.) Why change a successful strategy when USA has a critical weakness that China doesn’t...elections. They’ll play long game. It’ll take 5 eyes and others to bring down the elephant.
On the brighter side. China blinks, US and World inventors/biz prosper. Trump loses, he’s a goner and ticker RST could have a breakout move up w Mandarin language lessons.