The Market is showing a great amount of resilience in the face of domestic and foreign bank failures; on the other hand (as economists are prone to say), the S&P 500 continues to fail below its 200 day moving average…NOT a sign of strength.
So…to reiterate…we’re not yet seeing a Black Swan event or a failure of the system. What’s happening in the economy is what should be anticipated during a Fed tightening cycle. What you’re witnessing isn’t a failure of the system, it’s the way the system is designed to work (by the Central Planners).
We’re currently in the contraction phase of the Business Cycle.
The below chart is a simple illustration of the Business Cycle. I discuss this topic in episode 407 of the Wealthsteading Podcast. If you understand this cycle, you’ll be a better investor.
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