Stocks had another negative session on Friday capping off a losing week after the Fed raised interest rates and pledged to keep monetary policy tight. Investors are not keen on the tighter for longer strategy and their fears of recession are the new bump in the night keeping investors on edge.
The little magician. I was in an Uber with my family yesterday traveling through a part of Manhattan which most Manhattanites avoid at all costs: Times Square. It is possibly the most captured part of the city in paintings and photographs. That is part of why it is typically jampacked with tourists from all over the world… and even neighboring states. To be fair, walking through Times Square at night is quite a spectacle with wall-to-wall neon signs and giant video displays tickling your visual senses. There are sounds, the street musicians, the car horns, and the sirens that set a unique, city auditory backdrop. And yes, there are smells, mostly… well, interesting for lack of a better word. I prefer to focus my nose on the smells that emanate from the charcoal roasted chestnuts and mostly soggy soft pretzel vendor carts that line the streets. Really, no sense is left untouched when you walk through Times Square. We were in a hurry to take in a play, and we hoped that jamming into an Uber, which was billed as large enough for 5 but really should only hold 3, would get us to the theater in time for the curtain to raise. But alas, the best laid plans of mice and men often go astray, indeed. A ride which should have gotten us to the theater in 15 minutes quickly became 45 minutes and rising. There was not time to figure out what indeed, went astray. We had to jump out of the car mid-journey, posthaste, and walk… really quickly if we wanted to get there on time. That walk would take us directly through the heart of Times Square and would prove to be a challenge as well. You see, Times Square was mobbed with what seemed like a million people wearing light blue and white striped sports jerseys. There were cars stopped in the middle of intersections blaring loud music with folks hanging out the windows and skylights also clad in the blue and white stripes. There were large, flowing light blue and white flags flying above the crowds as far as the eye could see. Walking through the mass of blue and white proved to be even more challenging than driving. What in the world was going on?
You see, just a few hours ago my family, out to brunch, crammed around my son’s phone… along with the entire wait staff to watch the final minutes of the World Cup. The cup would go to the winner of a battle between France, the last winner, and Argentina, a great team, which had not held the cup since 1986. Argentina led for most of the game and France tied it up towards the end of the second half. Another goal by superstar Lionel Messi put the Argentinians ahead once again, only to be answered with a questionable penalty kick by France which, once again tied up the match. The game would go into a scoreless overtime. That left a penalty kick shootout as the deciding factor for the cup. I won’t go into any more detail other than to let you know that, if you don’t already know, Argentina was the victor. We made quite a ruckus at the usually subdued eatery, but we were in luck because there were apparently soccer fans amongst the diners, not to mention a cute but quite loud baby at the table next to us. “Why on earth is he talking about soccer,” you are wondering?
You see, weeks ago when the World Cup began, I wrote a note about phenom Lionel Messi, the Argentine superstar footballer. “There are no sure bets… none,” read the tagline (November 23rd). The note detailed how a match between Argentina, the third ranked team, was beaten in an upset by the 51st ranked team Saudi Arabia. I used the event to illustrate the reality that on Wall Street, despite all the statistics, there are no sure bets. Now, that same team has fought their way through qualifying, the group stage, the round of 16, the quarterfinals, the semifinals, and the final game to emerge the victor. The team’s skipper Lionel Messi is referred to as the GOAT by the younger generation (that stands for Greatest Of All Time). He has won more Balon d’Or awards than any other player in the award’s history. Indeed, he has numerous awards gracing his trophy room and his Argentinian national team is considered one of the greatest, though it was not favored to win yesterday’s game. The one thing missing from Messi’s trophy case was indeed a world cup trophy, but his yearning ended yesterday as Argentina took home the biggest prize in not-American football. Early on in the match, the team with good fundamental skill lost a match unexpectedly and against all odds. That event proved that nothing is certain and could be readily applied to the errant behavior of the markets. Now, we can use the same fundamentally strong team to show that success over the long term requires good fundamentally solid investments and lots of patience. There are many stocks out there with strong fundamentals and solid prospects, and most of them have suffered along with the markets in this past year. The year ahead will bring many more challenges, but the strong ones like Messi and his Argentinian brothers, will weather the storms. There are still no guarantees, Brazil, the number 1-ranked team was knocked out in the quarter finals by Croatia (12th ranked) and Belgium, the number 2-ranked team was sent home early in the group stage. That goes to show that patience alone will not guarantee success. We will have to be focused and nimble with our portfolios if we hope to hoist that iconic trophy.
We missed the first 20 minutes of the show, but the experience of being caught up in the mass of blue and white made it worthwhile. The play, what was left of it, was fantastic as well.
FRIDAY’S MARKETS
Stocks closed in the red on Friday as recession fears overhung the session. The S&P500 fell by -1.11%, the Dow Jones Industrial Average traded lower by -0.85%, the Nasdaq Composite Index declined by -0.97%, and the Russell 2000 Index slipped by -0.75%. Bonds declined and 10-Year Treasury Note yields added +3 basis points to 3.48%. Cryptos fell by -4.12% and Bitcoin dropped by -3.23%.
NEXT UP