| | | | Consumer Confidence Plummets and Commodities Are About to Soar
Last week, Powell went on and on about how the economy was incredibly strong and resilient. Nevermind the apparent contradiction between a strong economy and the need for a 50 bps rate cut only ever seen during economic emergencies.
The Fed did what they did, and now Americans will live with the consequences. And it looks like those consequences may become apparent sooner than later. Consumer confidence numbers were just released this morning, and it marks the largest drop in consumer perception about the economy since 2021.
Americans are growing increasingly worried about jobs and the economy. Forget what the numbers tell you — the government can manipulate them to say whatever they want. People can’t manipulate their wallets however. And people are starting to worry!
Meanwhile, the U.S. is not alone in its economic malaise. China has been unable to reinvigorate its economy, and now the CCP central bank is resorting to stimulative measures. China is the world’s largest buyer of commodities. Once they start injecting cash into the system, commodity prices will likely rise again once all that Yuan is flooding the markets.
Higher commodity prices = more inflation. Powell cut too soon! The second wave of inflation is coming. Mark my words. This is the common mistakes that central banks make — cutting too soon. However, stocks will only go up. Everyone has to outpace inflation somehow, and the only game in town is U.S. equities.
Levels
BABA:
$BABA is jumping after China announced its stimulative measures. I think 4 OCT 24 $96 CALL could be a nice trade.
COST:
If consumer is failing, cheap bulk dealers like $COST will do good. I like $COST at $920. 4 OCT 24 CALL. | | | | |
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