When trading financial assets for quick gains, every little blip on the radar feels like a monumental event. Having to flip between multiple charts and news scanners can be exhausting, especially in this current market environment where the market’s signals are confusing.

I’ve consistently outperformed by just sticking to my principles, viewing the big picture, and letting the data guide me instead of getting caught up in the constant noise. After all, it’s hard to lose over the long run when you’re taking inspiration from the likes of Warren Buffett, Charlie Munger, Peter Lynch, Howard Marks, and other legends.

Following in their footprints is a recipe for success, but only if you’re willing to expand your knowledge and understand exactly why you own what you own. You’re definitely heading into problem territory if you can’t explain it on one side of an index card or don’t even know why you bought or sold something.

This is particularly true when the markets whipsaw back and forth like they’ve been doing for a while now. This is happening because there’s information overload and the data points don’t all point in the same direction.

First of all, the high level of job openings in March seems to indicate a strong U.S. labor market. On the other hand, the number of job openings is in decline having gone from 8.8 million in February to 8.5 million in March. That’s the lowest reading since February 2021 and is not a good sign for the economy.

However, compensation costs – also known as wage growth – increased 1.2% in the first quarter of 2024. That’s higher than the prior quarter’s 1% increase, and it also came in above the 0.9% wage growth that economists had predicted. 

93% Of Investors Generate Annual Returns, Which Barely Beat Inflation.

Wealth Education and Investment Principles Are Hidden From Public Database On Purpose!

Build The Knowledge Base To Set Yourself Up For A Wealthy Retirement and Leverage The Relationships We Are Forming With Proven Small-Cap Management Teams To Hit Grand-Slams!

    In this bizarre, upside down market, good news is sometimes construed as bad news. Wage growth hasn’t kept up with inflation for the American middle class in decades, so a bump in wage growth should be heralded as good news.

    In the financial markets, though, fear of the Fed is often stronger than hope of a middle-class recovery. To quote Capital Economics chief North America economist Paul Ashworth, “The persistence of wage growth is another reason for the Fed to take its time on rate cuts.”

    That’s because when companies pay higher wages, they’re likely to pass those costs to consumers in the form of higher product and service prices, which leads to higher inflation. Wells Fargo senior economist Sarah House explains that the seemingly positive wage growth print is “yet another data point that suggests the inflation slowdown that began this time last year stalled out in the first quarter of 2024.”

    This is a textbook example of the huge difference between Wall Street and Main Street. Middle-class American workers getting raises to keep up with inflation isn’t viewed as a good thing since corporations view it as a burdensome expenditure. Mega-cap stock investors view wage growth as negative as well since higher wages will weigh on corporations’ bottom lines.

    Plus, wage growth isn’t what Federal Reserve Chairman Jerome Powell wants to see. His objective isn’t to enable prosperity for American workers. Instead, Powell will hold on to his 2% inflation target even if there’s massive collateral damage to the middle class.

    We’ve seen this in action during the past several years as the Fed’s relentless series of interest rate hikes led to mortgage interest rates of 7%, 7.5%, and even 8%. Additionally, home prices in February rose 6.4% year-over-year, the fastest rate of increase since November 2022.

    Thus, the American dream of homeownership has become impossible for legions of millennials whose parents and grandparents expected them to be on their second home by now. Even so, the early May Federal Reserve meeting only reinforced Powell’s vision of 2% inflation at all costs.

    The Fed’s statement after the committee opted not to cut interest rates again warned that it won’t “reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent.” Powell gave large-cap stock traders some hope by saying, “It is unlikely the next policy move will be a hike.”

    It’s hard to make sense of the mixed signals, and trying to predict exact outcomes for the immediate term is a fool’s errand. Thankfully, I’ve got a diversified portfolio that benefits in the long term from the government’s print-and-spend policy and the dollar’s inevitable debasement. The whipsaws and Fed’s stubbornness might frustrate short-term traders, but they can’t derail my path to wealth and prosperity.

    Prosperous Regards,
    Kenneth Ameduri
    Chief Editor, CrushTheStreet.com

    Governments Have Amassed ungodly Debt Piles and Have Promised Retirees Unreasonable Amounts of Entitlements, Not In Line with Income Tax Collections. The House of Cards Is Set To Be Worse than 2008! Rising Interest Rates Can Topple The Fiat Monetary Structure, Leaving Investors with Less Than Half of Their Equity Intact!

    Protect Yourself Now, By Building A Fully-Hedged Financial Fortress!

      Disclaimer/Disclosure:
      Legal Notice: No matter how good an investment sounds, and no matter who is selling it, make sure you’re dealing with a registered investment professional. Use the free, simple search at investor.gov

      We are not brokers, investment or financial advisers, and you should not rely on the information herein as investment advice. We are a marketing company. If you are seeking personal investment advice, please contact a qualified and registered broker, investment adviser or financial adviser. You should not make any investment decisions based on our communications. Our stock profiles are intended to highlight certain companies for YOUR further investigation; they are NOT recommendations. The securities issued by the companies we profile should be considered high risk and, if you do invest, you may lose your entire investment. Please do your own research before investing, including reading the companies’ SEC filings, press releases, and risk disclosures. Information contained in this profile was provided by the company, extracted from SEC filings, company websites, and other publicly available sources. We believe the sources and information are accurate and reliable but we cannot guarantee it.

      Please read our full disclaimer at CrushTheStreet.com/disclaimer