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The biggest risk to the markets right now

Nov 11, 2021

Good morning!

Forget the markets, let me start with the really important stuff.

To every Veteran reading along … thank you for your service, your sacrifice and for stepping forward when others could not or would not. My family and I are grateful.

Now, on to the markets.

Here’s my playbook:

1 – The biggest risk to markets now is Jerome “JPow” Powell

The markets took a bit of a beating yesterday after a blistering CPI (Consumer Price Index) showed record price increases. Up 6.2% YoY to 30 year highs.

The biggest single risk the markets face now is that Fed Chair Jerome Powell suddenly sees the error of his ways and decides to accelerate the tapering schedule now in place. It could be this generation’s “Volker” moment; not a comforting thought!

Seems to me that buying a few specialized inverse funds like those I recommend in One Bar Ahead™ is super prudent if you don’t own ‘em already. A few well-placed put options on the S&P 500 Index itself could also pay off if there’s a knee-jerk reaction.

2 – Rivian is the year’s biggest IPO

Rivian hasn’t made a dime yet but you’d never know it from the price action. Shares popped 29% in yesterday’s action and are already up in the early going. (Read)

3 – The only reason I’d buy Disney at this point.

Disney shares took a dive after they reported less than stellar earnings yesterday with the main culprits being stagnating Disney+ subscribers (118.1M vs 119.6M expected). Missing top and bottom-line numbers didn’t help either. If Disney can’t figure out a way to boost their streaming numbers, they could be in for a world of hurt. (Read)

I do NOT own shares and won’t because I’ve long thought they are riskier than most investors are prepared to believe. Unless, of course, they split it up.

4 – Cathie Wood agrees with me

This week’s Tesla follies are a blip on the radar. I said “speed bump” yesterday during a conversation with the fabulous Dagen McDowell on Mornings with Maria. Either way, nobody will care when shares hit $2,500 to $3,000 within the next 24-36 months. And they will. (Read)

5 – Bitcoin tops record as inflation fears grow

You can’t say I didn’t warn you, but I did. Bitcoin is powering higher and I don’t think $100,000 a coin is out of line for reasons I laid out in the November issue of One Bar Ahead™, my monthly investing journal. (Read)