The Rising Influence of Rising Affluence

[10nisman]

I may have mentioned before that I'm a fan of top-down analysis. What is the market doing, the sector, the industry and finally companies within that industry.

The problem with top down analysis --- very few people have the data and willingness to spend the time to truly understand what is actually going on in the economy until well after the fact. You thought the Fed was going to do a couple rate hikes for the year and stop, you also didn't think the Fed was going to raise 75 basis points last month nor 75 basis points in November even though Powell has been clear as mud on both.

WHR should have been an obvious short --- but why wasn't it? Because your view of interest rate expectations and the corresponding impacts on the housing market / housing related equities were nowhere near reality. So, how did your top-down analysis help you from a return standpoint in 2022?

POV only: WHR is a strong candidate for income investors as they have a 12 year history of raising dividends and the dividend currently stands at 5.3%.

Past performance is no guarantee of future results. WHR cratered 60+% during the GFC. Given the Fed has no plans at cutting rates for at least a year and then not significantly, WHR is facing some sizable headwinds in 2023 and likely 2024.

Once the SPX broke below the June low and the Fed maintained their bullish rate raising stance, all bets are off as to when the market bottom may be put in.

Fed pauses / pivots / rate decreases aren't a sign of market bottoms.
Past history would tell you the Fed cuts rates well in advance of market bottoms. There's a long way to go before this cycle is played out...