Gordon Reid's Top Picks: November 8, 2022
BNN Bloomberg
Top picks from Gordon Reid, president and chief executive officer, Goodreid Investment Counsel
FOCUS: U.S. equities
MARKET OUTLOOK:
As poor as September was in the financial markets, October was its mirror image. These extremes happen with regularity in markets, fair value is just a pit stop on the way to oversold or overbought. Such volatility is easily explained. The recent U.S. Federal Reserve statement that sounded somewhat dovish was followed within minutes by a hawkish-sounding Fed chair, Jerome Powell. This seems like a good cop bad cop routine, the desired result being messaging that the Fed may slow down its interest rate increases to see whether the economy is responding to the tightening (the written message), offset by the “we are far from finished” hawkishness of the press conference. The last thing central bankers want to do is waste all the work tightened monetary conditions have accomplished by signaling to markets that all is well. Inflation is beaten by creating fear within markets. That is the weapon that curtails economic activity, reduces demand and causes businesses to lay off workers or not hire new ones.
