Transcript:
Tom Vaughan:
Everybody, welcome to Tuesday, the S&P 500 was at point 9%. Today, NASDAQ was the big winner again today at 1.4%. So we’re seeing, you know, some good move motion from the growth stocks as a whole. So far this year, we’ve seen a lot more emotion from the value stocks, like financials and energy and those types of things. So interesting to watch this, the chairman for the Federal Reserve was testifying in front of Congress today, he’s been renominated for another four years, this is part of the process, they’ll have a vote, he’s expected to be voted in. But the market pays a lot of attention to what he has to say. And here’s the thing that he thinks most interesting about what he’s talking about is that, you know, when they raise interest rates, they can slow down demand, but they can’t fix the supply chain. And inflation is being caused by both. So for example, when they raise rates, consumers, it costs more to borrow companies more to borrow, and that brings demand down, but it doesn’t fix the supply chain, which is also contributing to inflation. And so when the supply chain gets better and better throughout the year, which hopefully it will, that will also have an impact on inflation. And so this could be an issue where the Federal Reserve doesn’t have to raise rates as much if the supply chain can be fixed at a faster rate.
So the interesting thing about supply chain is was getting better and better throughout the end of the year. And then this Omicron variant has hit. And there’s some worry now because China has had a lot more lockdowns around these infections and what have you. And that’s a big piece of the world supply chain actually. So but hopefully Omicron is a little bit of a shorter, you know, wave maybe higher, obviously, because of the transmissibility. But we might be able to get the supply side working better. And then the Federal Reserve doesn’t have to raise the rates as much. And that would create, I think, a really good stock market, actually. So that’s one of the things I don’t think people are talking about enough is the fact that one of the ways to fight inflation is to have more supply at a quicker pace. And that’s one of the problems we’ve been having so far, just with labor issues and all kinds of different things. So so down demand a little bit with raise rate increases, but increase supply and maybe the combination of the two means they don’t have to raise rates as much, which would be awful nice, and we still get inflation under control. And the market could respond quite quite nicely to that. So we’ll see what happens. But very interesting day again today. Good day today. Finally had some nice returns, and look forward to seeing what’s gonna happen tomorrow. Thank you.