3-22-24 Market Moment

By Randy Williams Gurian on March 22, 2024

The FED

Mr. Market and the FED rarely see eye to eye, and when they disagree, the market usually takes a beating and Mr. Market claims a victory. Yet, in those rare moments when the FED gets it right with respect to interest policy, unemployment, and inflation, the markets go gangbusters. I recall a period in the 1990s when the markets were having a difficult time and investors were in a sour mood. My wife had a couple friends out from New York for a visit and Richard—a professor at Hofstra University in Long Island—was so excited because the Fed decided to lower interest rates and the markets had a wildly favorable response. These rare moments are always fun to experience, but you know me: I want to take it a step further.

I want to understand why the markets rallied, and I think this time around it was twofold. First, the Fed is winning the battle against inflation, which the bulls love, and two, keeping interest rates higher for longer will extend the market rally and should allow the economy to experience a somewhat soft landing. I do think there is still room for policy errors as we go forward, and I know the economy is not great, but don’t tell that to the NASDAQ, the DOW, or the S&P, as all three major U.S. market averages hit record closes this week. Interest rates are likely going to stay elevated for a while, and when they drop, it won’t have the quick impact everyone expects. Slow and steady will win this race, so enjoy pie while the markets are serving pie. In addition, the AI-driven rally continues to provide investors with something solid to hang their hats on.

Speaking of hanging your hats on something solid, the Mariners season begins at home next Thursday against the Red Sox. I am getting slightly more excited about the club. The M’s are having a strong spring at the plate. They are leading the majors in runs, hits, and extra base hits over their last 7 games. Granted, that is a small sample size, but hopefully it carries over to and through the season. I have my eye on a  few of our newer players as well as a couple of older ones. Watch Dominque Canzone swing the bat. He’s impressing me so far with his quick bat speed. Also, Ty France redid his swing over the offseason and looks locked in.  Finally, I look for JP Crawford, Cal Raleigh, and, of course, Julio to have strong seasons at the dish. Go Mariners.