The Capitalist Investor - Episode 143

The market has a lot of reasons that it could go lower. Does that actually mean that it will re-test the lows that we saw in June? If so, what is that going to look like and how quickly will that happen? One of the major topics in today’s world is the energy crisis & stagflation environment we are seeing over in Europe. Is the energy crisis going to impact America? What about other geo-political events that could influence the direction of the American economy & the stock market? In this week’s episode of The Capitalist Investor, we also take a look at Jason Aldean getting cancelled, since someone or something seems to be getting cancelled every week!

    • [0:54] Stock Market Going to Re-Test Lows?
    • [06:05] Energy Crisis in Europe – Coming to America?
    • [12:46] Jason Aldean – Cancelled

Stock Market Going To Re-Test Lows?

Earnings & Earnings Growth essentially dictates the direction of the stock market. And right now, street estimates have earnings growth somewhere around 8% for 2023.

Is 8% earnings growth even possible next year with all of these headwinds around us? We saw the multiple on the stock market contract, but we really haven’t seen earnings estimates come down.

The market has been very confused trying to digest all of this information. Just take a look to the past two weeks and how quickly we dropped 10% in the markets after rallying 20%. Take a look at the 2.5% intra-day swing we had this past Friday from top to bottom in the market. And it’s interesting that market movements are essentially controlled by the perception of what the Federal Reserve will do next.

If we get good economic data, then the perception is the Fed has more room to hike. The market sells off when we get good news.. If we get some bad news, the perception is the Fed has to pivot, and the market rises. Never in the history of the stock market or economy are we so reliant on the Federal Reserve and what they will do next.

Energy Crisis In Europe – Geopolitical Events

We have to remember we live in a global economy. Europe is in a huge stagflation environment right now with their energy crisis. That will greatly impact companies with international earnings. We are already seeing a bit of an energy crisis here in the United States over in California. All of these things are impacting inflation and the cost of goods & services, which is being passed along to the consumer.

What happens when people are being told they can’t turn on their electricity anymore? What about when businesses can’t operate because of the energy shortage? All of this can have a much larger impact on the economy than most people realize.

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Keep Listening to The Capitalist Investor:
Episode 15:
Spending Strategies in a Bear Market, Ep #15
Episode 31:
Handicapping the 2020 Election, Ep #31
Episode 47:
11 Investments in Your Home That Pay Off, Ep #47
Episode 63:
Jeff Bezos and Amazon: Past, Present, and Future Ep #63
Episode 79:
7 Ways Biden Plans to Tax American Families (Part II), Ep #79
Episode 95:
5 Beaten Down Stocks to Buy on the Dip, Ep #95
Episode 111:
Special Episode – Talking Energy with Daniel Turner, Ep. #111
Episode 127:
Retail Earnings Tank & What The Heck is Greenflation? Ep. #127