Market forecast to 2022 second year

 

Client's letter as of July 19 2022

Hi York,
How are you doing in Taiwan? I sincerely hope all is well for yourself and your wife.

Another point, this is a good time for me to review the status of investments and make further decisions. I wonder if you are available for a phone call one day this week so we can discuss the details of the investments. I would like to know your opinion about some investments that i want to do during this period of time.
Kindly let me know and thank you in advance

With My Best Regards

Bob
MBA

My workings in response to client

Hi ~ Bob

From mid-May market give a rebond for breath, roll a few days and disappointedlly start fallen again at 9th June  

This pic is chart of S&P 500 Index, roughly the range of 4,107 ~ 4,175  will be a pressure-zone for market climbling in coming  month till early September 

On 13 June, it suffered a 5% market slump one night, many investor's money is gone at that price ( some people are sold-off, some not sold and keep the position like yours and mine )  

1.Let's take a closer look into why the market slump during 9 th ~10 th June, I think the main reason is that at 10th June US Bureau of labor statistics released a number as following :

Table A-1. Real earnings for all employees on private nonfarm payrolls, seasonally adjusted

Labor real hourly earnings from April - May - June, separately 11.04 - 10.97 - 10.86, fantastically goes for sequential 3 months decline. Labor real hourly earnings means that employee get less and less job paid after inflation adjusted. Would it like to be a devastating cut on Personal consumer expenditure till the end 2022 !? Who knows ~ 

2. There's a good point regard to now US supply chain of manufacturer described by Master Ray. Dalio as following :

Sharing his analysis of economic cycles, Dalio explains that, typically, a recessionary cycle leads to a lot of stimulation by central banks, resulting in an economic expansion that is followed by inflation. The price spike is then followed by tighter monetary policy that leads to a recession, and then the cycle repeats again. On average, the cycle lasts about seven years, but the length of them is determined by how much debt and money creation there is and how much slack capacity there is before production constraints are hit.

3. Turn to the Bond market, the 10 years - 3 months Treasury spread shrink down recently, which indicate that  many investors sold-out stock position and put money into US Treasury for better protection,

It imply that recently market's postive performance seems a rebond only, it lacks of constantly cash flow into as momentum for next moves-up, this statement can be strengthened by recently market news : 

BofA Sees Risk of ‘Proper Capitulation’ If Earnings Disappoint

In the week through July 13, global equity funds had outflows of $2.9 billion, with US stocks seeing their first redemptions in three weeks at $1.6 billion, according to the BofA strategists’ note, citing EPFR Global data. Global bonds attracted $1.6 billion, while $15.1 billion flowed into cash

Finally make a conclusion in short :

If you're appeal to the recent market-up and want to invest little money to make yourself a rush-in, you can go for it ~ and remember whatever it takes, you need to carry on till the end year Christmas, because you are already in

I think the most likellyhood the pattern market present ahead of us in 3 ~ 6 months, not super up or sppokkey slump, it would continue to be bumpy in a range of  3900 ~ 4300 S&P500 Index.