Up & Up

Estimated read time: 2 minutes and 5 seconds

In this week’s newsletter:

1. Market recap

2. Top holdings: what I am buying & selling

Market Recap

YTD returns:

• S&P 500: +3.42%

• Nasdaq: +12.97%

• Russell 2000: -1.63%

• US Dollar ($UUP): +0.76%

• Gold ($GLD): +8.3%

The Federal Reserve increased interest rates by another 25 bps this week

Here are some quotes from Jerome Powell, our fearless leader, and chairmen of the Fed:

"At the end of the day we will bring inflation down to 2%. No one should doubt that."

"If we need to raise rates higher, we absolutely will...we will eventually get to tight enough policy to get inflation down to 2%."

Not even the second largest bank collapse in our nation's history, Silicon Valley Bank, stopped Powell from hammering home a hike in interest rates. He didn't even budge by hinting at future pauses or cuts.

Can you believe the stones on this guy?

Are more bank collapses on the horizon? Despite Powell reiterating that our banking system is "strong", I don't believe we are out of the woods just yet on that front.

Even if Powell decided to pause/cut rates, which is what investors are desperately looking for, is that even a positive sign for the market's future?

History shows us...not so much:

During the Dot Com bubble of the early 2000s, the S&P literally tanked as interest rates were being cut.

Same story goes for the financial collapse of 2008:

So how about today? Interest rates continue to rise (and we might not be done rising) while the S&P decides what the f*** it wants to do.

Investor are begging for a pause. They're pleading for cuts. But based on history, are we sure that's what everyone wants?!

The kicker is, more interest rate hikes doesn't help us either!

As I stated earlier, the stones on this guy...

In The Account | my top holdings

1. GOLD & US DOLLAR

   1. This will continue to trigger people, but Gold is beating the S&P 500 YTD by almost 3:1

   2. Yeah yeah, I know what the Nasdaq is at YTD. Here's a tip for ya: tech hates rising interest rates

On The Radar | positions I want to build / sizing up

1. BONDS

   1. The long end of the curve (10Y & 30Y) are trending downwards as the bond market sniffs out a slowing growth environment. That's positive for duration plays like bonds

   2. The MOVE index (bond volatility) is at historical highs though...so while I may take a stab at some bond plays I'm doing so in a beta-adjusted environment. Smaller position sizes for higher volatility assets.

Off The Grid | removed positions / short selling opportunities

1. TECH - $XLK, $QQQ, $GOOGL, $TSLA, $NFLX

2. RETAIL - $XRT

3. HIGH BETA - $SPHB

4. CRYPTO - $BITO, $MSTR

5. HIGH YIELD - $HYG

6. ENERGY - $XOP

Until next week....

-BW

DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.