This has to be one of the most interesting starts to any calendar year we’ve ever seen.
The U.S. and other modernized nations pride themselves on their prosperity – the idea that there’s more than enough wealth to go around. But for the vast majority of the citizens, prosperity feels more like a dream, or perhaps even an illusion.
This is the best opening of any calendar year since 2003. But, as the markets toy with key technical levels for the major indices, I’m not convinced that this isn’t a sucker’s rally.
The government shutdown is nearing the longest one on record. President Trump will give a speech on the matter tonight. American politics is not letting up. Division between parties reaches an extreme.
The entire U.S. stock market has been volatile throughout the final quarter of 2018, shaking out risk-averse investors and creating havoc across the board. But it’s the bank stocks that have drawn extra attention as they’ve gotten hammered and aren’t showing any signs of coming up for air.
There’s no way of looking past this. The Federal Reserve, via its interest rate policy, its credit-creation maneuverings, and its expansion/contraction of the balance sheets, manufactures the economy’s booms and busts.
America, it seems, is in a quagmire: if the U.S. Federal Reserve hikes interest rates aggressively, there’s the risk of slowing the economy down; and yet, failing to raise interest rates could cause a run on the dollar.