Last week, I wrote about the big issues that I felt were most concerning to the stock markets. The first one I mentioned was the legislative issues facing Congress. By the time my e-mail was published, the debt ceiling limit had been agreed upon and was in the midst of getting passed and sent to the Presidents desk.
The main thing that I wanted to go over and share thoughts about today revolve around the quarter that just ended and the quarter that started on Friday. September has been the most challenging month for the broader stock markets, historically. That historical norm was to be tested this year, though. So far, 2021 had been a pretty good year for stocks. Stocks failed the test.
It’s not just the impact of rising costs of lumber and fuel that are making the markets nervous. When prices are rising, investors require higher interest on their loans. As interest rates go up, the cost of borrowing goes up, causing pressure on businesses and their ability to maintain profit margins. The cost of mortgages, credit cards rates, and all other loans will be impacted.
Thanksgiving is one of my favorite holidays, especially in years like 2020. It’s the time that we are truly encouraged to pause and reflect on everything around us - our family, friends, our blessings and our challenges. Even when things seem bad, there are things to be thankful for.
I prefer to think of things as the “next normal”. The biggest reason is that it acknowledges the fact that the world is always evolving. Things are always changing. I’ve heard some refer to it as creative destruction.
I’ve had a few questions after my Friday Thoughts a few weeks ago about when I think we’ll get through the economic issues caused by the shutdowns in reaction to the virus. Unfortunately, there’s no way to know when we “get back to normal”. I think its more likely that we never get back to where we were, but will have deal with some large scale changes to how we live, work, and socialize going forward. I’d like to share my thoughts on some of the issues we’re likely to face, economically, in the near term. I’ll try to share some of my thoughts of what things could look like in the long term next week.