Transcript:
Tom Vaughan:
Hello, everybody, welcome to Tuesday, the S&P 500, unfortunately was down 2.8%. Today came back down to the lows that we established in mid March, we have not gotten back down to the lows that were established in the morning of the invasion of Ukraine on February 24. So we’ll see how that plays out. We have two big catalysts driving the market down right now, Federal Reserve, aggressively talking about raising interest rates to fight inflation, which really kicked things off last week. But the reason that the market is responding so aggressively on the downside to that commentary, which has been made for a while, is because it’s an in combination with what’s happening in China, what’s happening in China can already slow down the economy, China’s essentially the world’s supply chain for all intensive purposes, as they close down cities and closed down factories, obviously, you’re gonna have a hard time, you know, selling things that you don’t have Texas Instruments, reported their earnings after hours are pretty good. How about the stock dropped 5% After hours, because they talked about having some softness in future quarters due to what was happening in China. And then obviously, if you can’t get supply, you might have more inflation.
One of the problems is we have this high demand and not enough supply. So if China’s cutting back on supply by closing plants, that puts more pressure on inflation also. So these are things that are happening, I think they work their way out here. Now, it might take a few months. But if we remember what happened at the end of 2018, Federal Reserve was raising rates at the same time that the federal government was trying to have sensually a trade war with, with China that was scaring the market that things might slow down. And it did, it came down and the Federal Reserve finally woke up and started actually lowering rates. And in 2018, we had good rate of return. So you can go through these periods where there’s just a disconnect from one organization to another, take some time. You know, the market is still about where it was a year ago. So it’s not a huge downturn. It’s not where it was at the all time highs, you know, said at the beginning of the year. But overall, these types of things happen on a fairly regular basis. I see this as opportunity. We still don’t see recessionary issues happening here in the short term. So when these markets come down, some of the best companies in the world are, are for sale, essentially. So being able to kind of continue to do the rebalancing and those types of things to accumulate those. It’s the same thing we did in 2018. It worked out so well. So we’ll continue to take a look at this. Again, the big issue is recession, which we don’t see right now. Got these other two forces that are battling it out here. We’ll have to see how that plays out. But anyway, let’s look forward to seeing you tomorrow. We’ll see what’s happening then. Thank you very much.