Waking up this morning, I was prepared to write about the implications for investors of a decisive Republican takeover of the House, while also gaining slim control of the Senate. We may not know the conclusive outcomes for several days or even weeks since the Georgia Senate run-off election occurs in early December. But a tectonic shift among voters did not occur. CNBC NPR The most we can say for now is that both the House and Senate are likely to be closely divided.
Historically speaking, the stock market tends to go up the year after midterm elections and “divided government” often leads to stock market outperformance. New York Times
Channeling My Inner Fritz Meyer: Many of you have heard Fritz Meyer, the economist and market strategist, speak and know how highly we regard him at RSWA. Fritz is data driven and is skilled at focusing on market and economic fundamentals. Here are some highlights from his monthly financial advisor webinar yesterday:
- The Leading Economic Indicator Index has declined the last seven months, signaling a recession is coming.
- He noted Fed Chairman Powell’s language last week that it was “very premature to think of pausing” and that we have “a ways to go”.
- Unparalleled consumer demand for goods (as distinct from services) during the pandemic led to the inflation issue.
- Job openings far exceed job seekers.
- Household balance sheets are strong.
- Consumers continue to spend.
- Housing starts have nosedived.
- The stock market is about where it should be, given long term earnings and performance graphs, suggesting that the stock market got ahead of itself before this bear market.
- Economists Surveyed by the Wall Street Journal expect a recession in 2023 but believe it will be relatively short.
- The Fed Funds to the Ten-Year Treasury yield curve is flat.
Attempting to distill all the data and points from Fritz, what I thought I heard is that the most likely economic scenario is a short and mild recession in 2023. If anyone is interested in seeing the Webinar slides, please let me know.
Elon Musk and Twitter: Elon has total control of Twitter now and has begun large layoffs and restructuring of Twitter content policies. He has said before that Twitter should be a free market of speech, only banning what is illegal. I claim no special social media insights but do not believe that this venture will end well for Elon. He needs Twitter to be much more profitable to sustain his investment. It is difficult to see how thought leaders will be attracted to a platform rife with misinformation and offensive content. Advertisers are pulling back already, waiting to see if the new Twitter will tarnish their brands. Washington Post The most active users are already leaving. Reuters What Twitter does have going for it is that there is no credible alternative. Mastodon gets mentioned. It is growing rapidly but has a steep learning curve. Entrepreneur The Twitter end game for Elon? He imposes user fees but loses net advertising revenue. Twitter loses its cache among thought leaders. He sells at a big loss within a year to stop the bleeding. I have no idea how hard it would be to develop a credible Twitter platform but must believe that the pockets are deep enough in the tech and entertainment world to bring a viable alternative online in a relatively short period of time.
Lifestyle Notes:
Droves Leaving Boston-Portland the Most Popular Destination: The rise of remote work opportunities may play to the favor of cities like Portland. If you do not have to live in a large metropolitan area and commute into work, you will look at more appealing lifestyle alternatives. Indeed, that is what appears to have happened as Portland is the most popular destination for those leaving Boston. boston.com
All in the Family Tops Seinfeld: The Globe just finished up a fun series where readers voted on their favorite television shows over the last several decades. It was set up like a sports tournament with head-to-head matches. The winner? All in the Family, one of my wife’s favorite shows ever. Seinfeld, my favorite, came in second. Boston Globe
Chicken Soup Works! Battling a cold this week has led me to a quick review of the various remedies. As best I can tell, nothing is a cure. A cold must run its course. My favorite remedy though has to be chicken soup! It brings back nice memories of having chicken noodle soup growing up. More importantly, there is a medical basis for the belief that it brings relief from symptoms. WedMD
Health Benefits of Almonds: You often hear that almonds make a great snack. Nuts in general are healthy although there is an issue with the amount of water it takes to grow almonds. Almonds promote gut health. Medium Almonds also reduce facial wrinkles. Nutrition.org
Portsmouth, Ogunquit and the Holidays: Planning some holiday outings? Keep Portsmouth and Ogunquit in mind. These small Maine seacoast towns made the top twenty nationally for best Christmas towns. WGME.com
How to Fix Biggest Sleep Killer in 15 Minutes: The linked article says that the biggest enemy of good sleep is rumination, running negative thoughts through our mind in a mental loop. The answer? Plan your worry. Set aside time earlier in the day to list out your concerns along with some action steps. CNBC
“Cold Heart” (the Backstory): I have had this catchy song running through my mind for several months now. It is “Cold Heart (Pnau Remix)” sung by Elton John and Dua Lipa. Here is a fun mash-up of movie favorites dancing to Cold Heart. YouTube Others find it catchy too. Billboard selected it as the best dance song of 2022. We are surely into “who cares really” territory by now, but it turns out that Cold Heart is a mash-up of four previous Elton John songs with the tempo slowed and the key shifted to B-flat minor. Elton John does not sing any new music on the song, but pop sensation Dua Lipa has been recruited to sing parts of the song. Wikipedia Here is a fun mash-up of movie favorites dancing to Cold Heart. YouTube Lastly, in case anyone is still reading, here is a version which itself is a mash-up of an older Elton John concert and a recent Dua Lipa concert. YouTube
A Quote to Consider: “The only way you get there is through hard work. You’ve got to punch your ticket and pay the price.” Steven Pressfield
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