Transcript:
Tom Vaughan:
Hello everybody, welcome to Wednesday. The S&P 500 was up .3% today. And the news that was I think important today had to do with kind of what was talked about yesterday, just the Omicron variant itself. Pfizer finished some of their studies, we’ve been waiting for some of these original fear when this particular variant came out was that, you know, maybe we have to start all over again, if it completely evades the vaccines. And what they did find was good news. For those people with two shots, they have a pretty good chance of avoiding severe illness. And those people with three shots kind of back to where we were with the Delta, still might have some breakthrough cases and such. Were kind of playing, you know, catch up, and that’s what’s going to happen here, you know, the variants will come and they’ll, they’ll mutate, and then you know, they’ll have to figure out what shots or how many shots or those types of things that might come as far as that goes.
So, but again, what was important to the market here is that we’re not starting all over with the vaccines, you know, have some work, some work to go here, but they still very effective all together, at least according to the Pfizer test. So that’s fantastic. The market has been responding positively to that. And then secondly, and the debt ceiling area, really, the House passed this little bill that their doing: one time exemption to allow 51 votes to raise the debt ceiling, and Democrats with the Vice President’s vote do have 51 votes. So now it has to go to the Senate. It needs 60 votes to get through this, which is kind of strange. But nonetheless, that does seem to be 10 Republicans on board with this, what they’re gonna vote tomorrow, so we’ll see what happens. And then that gets passed, and then it comes back through, and then those 51 votes can raise the debt ceiling and kind of alleviate that problem. So we’ll see how that plays out. But it looks pretty positive.
And again, the market’s responding positively, this is our third day in a row up. And that’s a good sign as far as that goes. So now we’ll be able to focus on what’s happening with the Federal Reserve. You know, they met last week with the Congress and talked about what was happening there. And it looks like they’re going to be, you know, talking at their meetings next week, about accelerating / cutting back on the stimulus. So…they’re buying $120 billion worth of bonds, they’ve been cutting back $15 billion a month, starting last month. And so now they’re talking about cutting back $30 billion a month. So it might be done, you know, buying those bonds, and cutting back on stimulus, essentially, by March instead of June.
So again, the positive on that is the fact that there is this fear of inflation, because on Friday, we’re going to get the inflation number, and it’s probably gonna be pretty high. That word is, you know, the rumors are around 7%. So the market might react negatively to that. And then maybe if they cutting back on their stimulus faster, the market can look at that as a positive as far as that goes. So because it’s this weird, you know, balance that they’re trying to accomplish, where they’ve got, you know, the stimulus they’re trying to do to keep the economy growing, not let it fall apart, get jobs, growth, you know, that type of thing. But if they do too much, then you get this inflationary environment. So they’re going to have to find it find that kind of balance point to get to get this to work perfectly. So and that’ll be difficult actually, and that’ll create some volatility, but altogether, I think, you know, the key pieces here are the fact that they are maybe lightening up on inflation and the economy’s really good. I mean, one of the reasons for having this inflation is because the demand is very high. And that’s a good thing as far as that goes. So, anyway, look forward to seeing what’s going to happen tomorrow. Thank you very much.