Both the Stock and Bond Markets, which had been in deep oversold levels. had strong rallies today to start off October. One has to wonder how much of today’s action was propelled, by the Federal Reserve’s “Emergency” meeting on Friday? Over the years, whenever the markets have been having sharp declines, a group of mysterious buyers seem to step in to save the day. They have become to be known as the Fed’s “Plunge Protection Team.”
Today’s rally was also fueled by news that the OPEC cartel, when they meet on Wednesday, will probably cut daily Oil supplies by one million barrels a day, to counter bearish price trends due to slowing world economies.
Although certainly not investment advice, I remain cautiously bullish on oil, and cautiously negative on other stock and bond markets.
I continue to think the Central Bankers of the World, led by the Federal Reserve, have an impossible task of controlling inflation without causing a significant recession in 2023.
Not investment advice just some thoughts of the day.
I am reminded of a quote by a very successful investor, Warren Buffett:
“You don’t know who is swimming naked, until the tide goes out.”
Last week it was British Pension Funds, Will it be Credit Swiss and other overextended Banks who we learn next week are swimming naked?