In his podcast addressing the markets today, Louis Navellier offered the following commentary.
Clarity For Nervous Investors
Today’s FOMC statement is anticipated to be a big deal and should provide more clarity for nervous investors. I am anticipating that in the wake of the 2-year Treasury collapsing from 5.06% to 4.23% that the Fed will hike key interest rates 0.25% and then issue a “dovish” FOMC statement.
Q4 2022 hedge fund letters, conferences and more
Some dovish words that I am looking for are “data dependent, lower market rates and inflation cooling.” It will also be interesting if the Fed cites any stress in the U.S. banking system.
The survey of FOMC members' “dot plot” should also provide some clarity on when the Fed will stop raising key interest rates.
Springy Home Sales
The National Association of Home Builders on Tuesday announced that existing home prices declined on an annual basis for the first time in 11 years (since February 2012). Specifically, median home prices declined 0.2% in February to $363,000.
Since June, when median home prices peaked at a record $413,800, median home prices have declined 12.3%. The good news is that existing home sales rose 14.5% in February to an annual pace of 4.58 million.
The bad news is that existing home sales declined 22.6% in the past 12 months. Although mortgage rates initially rose in early February, they resumed falling in the past five weeks and are now at 6.48% according to the Mortgage Bankers Association.
The spring is a seasonally strong time for home sales, so if mortgage rates continue to decline, sales may continue to pick up.
Atomic Bond
Chinese President Xi Jinping arrived in Moscow this week. President Xi said that “political mutual trust is deepening” between Moscow and Beijing. However, President Xi did not apparently sway Vladimir Putin to agree to a ceasefire with Ukraine.
Specifically, after China issued a 12-point position paper calling for talks toward ending the Russian conflict with Ukraine, President Xi said “We are always for peace and dialogue. We stand firmly on the right side of history.”
Interestingly, President Xi is expected to call Ukrainian President Volodymyr Zelensky after his Moscow trip, so it will be interesting if a ceasefire can ensue.
The primary reason that China wants a ceasefire in Ukraine is that the G7 has started sanctioning Chinese companies that do business with Russia.
Now that the G7 has accused Russian and Vladimir Putin with war crimes, plus the International Criminal Court has issued an arrest warrant for Vladimir Putin, the West is not expected to negotiate with Russia on any ceasefire agreement.
It is obvious that China is relishing its new role as a leading international influencer since the U.S. refuses to negotiate without full NATO representation.
In the event that China eventually gets Russia to agree to a ceasefire, the stock market could stage a big relief rally. However, the sanctions on Russia will likely remain in place until the West successfully negotiates some Russian war reparations.
One outcome of President Xi and Vladimir Putin’s meeting is that China and Russia are deepening their cooperation on key atomic technology. Specifically, President Xi and Vladimir Putin announced a long-term deal to continue developing fast neutron reactors.
Back in December, Russia transferred via its nuclear giant Rosatom, 25 tons of highly enriched uranium to China’s first fast reactor, the CFR-600, which is a facility that could produce fuel for 50 nuclear warheads per year.
Naturally, this development has the Pentagon and Congress very nervous. Despite Western sanctions, Russia is the world’s largest supplier of nuclear fuel and its nuclear exports have surged in the past year.
Coffee Beans
A 104-year-old British woman is selling the house she has lived in since she was two years old - when her family bought it for £200. The house is now priced at £169,950. Mrs.Gifford is selling the house and moving to a nursing home in nearby Glastonbury because of her health. Source: Sky News. See the full story here.
