Dear Clients/Partners/Prospects:
It appears the market volatility we touched on and expected in April of 2021 was one year early. We are certainly in the thick of it now. There really isn’t really anywhere to hide as we try to steady ourselves on this bumpy ride we’ve had in the first three months of 2022. Equities have been a great place to be for many, many years now but markets don’t go straight up either. We think some pain may well be overdue, and we are going to manage that pain the best we can. We are continuing to add some new positions and subtracting others (retail in particular) as we navigate through these times. We also may be increasing our cash position if the volatility continues in the second quarter.
Federal Reserve chairman Powell has announced his intent to raise rates several times in 2022. This is some of the cause of the volatility in the markets, but rising inflation and geopolitical risks are the others. The price of consumer goods, gasoline, restaurant items and just about anything else you consume has increased substantially over the last six months. We’re sure you’ve noticed too. We’re hopeful that this tops out and prices start to come down. The nonfarms payroll jobs report rose by 431,000 jobs and unemployment dropped slightly to 3.6%. The number of people not in the labor force who currently want a job increased by 382,000 to 5.7 million in March. There are people that desire a job but can’t find one or don’t like the ones they are finding available. It seems coffee shops and restaurants are still short-staffed and struggling to keep normal business hours. Hopefully that changes as the summer weather approaches and students are looking for employment opportunities.
The Russian assault on Ukraine continues and this is the final issue that is causing some nervousness in the markets and of course the rise in gas prices. It’s tough to watch what’s going on over there but it also reminds us how great and safe it feels to live in the U.S. We do have it better than a large part of the world and it’s in times like this we need to remember that. This is the first outlook we haven’t had to touch on the pandemic so hopefully that is now in the rearview mirror and any future variants that come up are easily put to rest. We look forward to seeing all of you in 2022 in person!
Sincerely,
J.B. L’Esperance, ChFC
If you have questions about our strategies or would like to open an account with Barking Sands Capital, please give us a call at 952.500.8854 or 248.687.1400.