First off, some housekeeping. It has been brought to my attention that many of our e-mails may have been landing in your spam. Hopefully, we solved that issue; however, if you missed any of our last e-mails here’s a quick rundown for you to catch up on our views including a link to a CNBC appearance yesterday.

While we’re far from out of the woods, the Dow’s nearly 2,500-point move since last Friday sure is a refreshing and nice start. As markets have the tendency to do, just when it looked like all hope was lost and nothing in the world could go right, buyers stepped in and picked up some value while others panicked and sold. It wasn’t easy being a buyer or holding steady but that is precisely what we did and will always look to do when fear is in the air.

Real bottoms take time, and it is far too early to tell if this is simply an oversold bounce or a real bottom; however, one piece of news I find particularly interesting is this week’s PCE or Personal Consumption Expenditure index rose 4.9% which was down, yes DOWN, from March. This reading will spark a valid conversation about whether or not we’ve seen peak inflation.

Markets continue to take their cue from the Fed, which is taking their cue from inflationary pressure. Any hint at all of inflation easing will allow the Fed to back off their ‘crush the economy’ – errr ‘slow inflation’ – at all costs and spark a continuation in the equity run we’ve seen this past week.

Many talking heads such as Jim Cramer continue to advocate for higher rates and the need for the Fed to act quicker, while I fall firmly in the camp that the Fed has absolutely zero bullets regarding this inflationary cycle and will only serve to thrust us into a deep recession under the auspices of ‘saving the common man.’ While you may lose your job, those groceries will be cheaper.

I continue to be in awe of our administration during this period and while I am in full support of being environmentally friendly and finding sustainable sources of energy for our future well-being, I am shocked that our leaders stand silent when it comes to real action that would have an immediate impact on energy prices, and thus our gas prices, and ultimately one of the biggest components of our CPI. I think it’s funny to think that the Fed will do anything to bring down automobile prices when this is a direct result of chip shortages and a global halt in new production. I can’t help but laugh that many remain in awe of a labor shortage when we paid folks for years not to work. I digress.

Sooner or later, the inflationary pressure we’re facing will come down and will come down fast. I contend it will come down faster than most expect. Consumption will continue to slow and inventories will build…think Walmart’s and Target’s latest reports. When inventory builds, prices will come down even more and jobs will be lost.

The great uncertainty is the war, which continues to keep oil elevated. While it may take until November to turn our administration’s views, any subtle hint of resolution abroad should bring down oil very quickly and thus further reduce the inflationary pressure.
Any hint of lower inflationary pressure from the above scenarios and the Fed will take a victory lap. You’ll know better but we can ‘golf-clap’ along if that’s what they need.

Markets have and should continue to be volatile, but make no mistake about it, there’s value to be had and opportunities are much more plentiful than they were just a few months ago.

I’m not going to lie. I’m beyond rattled by what happened in Texas earlier this week. Take an extra moment to squeeze a loved one and remember that market movement is nothing compared to how important loved ones are and the relationships we have.

I consider our entire Joule clientele as family and hope you have a wonderful Memorial Day weekend. Let us remember all those who have served or currently serve to protect the freedoms we have in this wonderful country.

Until next time,