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Commentary: Paul Ebeling on Wall Street and Beyond

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“Again, more hawkishness from the Fed, high inflation…nevertheless my work says that naysayers risk missing out on a run to a record highs, Tune out the Noise” — Paul Ebeling

The US economy 

“While 2 Quarters running of negative growth is often considered a recession, it is not an official definition” 

The Big Q: The US economy just had a 2nd Quarter of negative growth. Is it in a recession?

The Big A: Hard to say.

A nonprofit, non-partisan organization called the National Bureau of Economic Research determines when the US economy is in a recession. An NBER committee made up of eight economists makes that determination and many factors go into that calculation.

The White House has pushed back against calling the current economy a recession. It is no doubt aware of the role the economy is going to play in the midterm elections.

Mid-year outlook on Stocks

Economic uncertainty peaked in 1-H of Y 2022, but it still remains high. Stocks may continue to feel the weight of Fed policy tightening, shrinking market liquidity and slower economic growth. We will know more later this month from Jackson Hole. In the meantime, this is market will reward risk-taking

Dow Jones Industrial Average: -9.7% YTD
S&P 400: -11.6% YTD
S&P 500: -13.6% YTD
Russell 2000: -16.1% YTD
Nasdaq Composite: -20.9% YTD

On the crypto front

Fidelity’s lead macro strategist Jurrien Timmer says that Bitcoin and Ethereum have reached a point where they are likely impervious to competition.

In an interview with Raoul Pal on Real Vision, Mr. Timmer compares Bitcoin and Ethereum to US tech giant Apple and its massive presence and dominance over its industry.

“Per Metcalfe’s law, the bigger the network gets, the more exponentially the valuation of that network becomes. And I’ve used the example of Apple computer, where you can see, if you look at their annual revenues, the more iPhones and all that stuff that they sell, the valuation goes up exponentially to that until it gets to the point – and then, when it gets to the point where the network is so powerful that it has such a large moat around it that even if I invent a far better iPhone tomorrow, I’m never going to be able to penetrate that network, because it’s too powerful.”

The macro expert says that while other crypto projects will continue to exist and compete with the Top 2 digital assets by market cap, Bitcoin and Ethereum have already established themselves as Top dogs.

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Have a prosperous week, Keep the Faith!

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Paul A. Ebeling, a polymath, excels, in diverse fields of knowledge Including Pattern Recognition Analysis in Equities, Commodities and Foreign Exchange, and he is the author of "The Red Roadmaster's Technical Report on the US Major Market Indices, a highly regarded, weekly financial market commentary. He is a philosopher, issuing insights on a wide range of subjects to over a million cohorts. An international audience of opinion makers, business leaders, and global organizations recognize Ebeling as an expert.