Market Talk
This week the market is undergoing a healthy respect for the coming Fed meeting on May 3rd to announce the next interest rate decision. Since the recent Fed action to stem bank failure fear has subsided, many believe that the Fed will likely raise rates again by 25 basis points. With perception that the Fed is back in control it seems that the inflation fighting will be front and center on the to do list.
Fed tightening typically will put pressure on hard assets like Gold and the newer perceived ether asset known as "crypto". Stocks can also fall because raising rates is intended to slow the economy with a side effect of unemployment to do it. An ironic effect is unemployment can make government spending increase as benefits need to be distributed.
Stock Talk
My previous post highlighted a few small starting position that I have dabbled in. This is an update:
Devon Energy (DVN): No change in my previous view. Holding a small position in Devon with an an over 9% dividend. I don't believe that we will not
need oil and natural gas for a long, long time. As far as the stock
goes, I sold it in the 70s for gain and I bought a small position back
in the low 50's. I think DVN merits watching and holding some to see.
With global production cuts, Devon may be in the sweet spot with their
oil and natural gas fields here in good ol' America. I am not talking a
large stock position though because there is risk of a future recession
slow down affecting demand. On the other hand, if DVN dips some for no
apparent good reason, I may add a few more shares with dry powder.
Bitcoin miners: This week, the bitcoin surge to the $30 K level has been challenged as a whale dumped 16,000 bitcoins on the market triggering a further selloff. In a prior post, I took a small position in RIOT bitcoin miner as they have amassed over 7,000 bitcoin and growing with continued operations. The buy-in point was in the $11 range with the notion that bitcoin may sustain near the $30 K . But, the recent bitcoin swoon has me concerned. I think RIOT is the best of sector, but if the bitcoin swoon continues, risk increases. As far as other miners, I would avoid entirely because the run like in CLSK came to far too fast with major expenses planned and likely share dilution.
Again any trading in bitcoin miners is purely speculation and as such is
a gamble. How anybody trades the crypto sector is at their own discretion and
risk
Dry Powder: Lastly, as a place to park "some" dry powder? USFR.
I posted on this previously. It should not deviate much from the $50
range as an etf but it is based on short term treasury notes and the
interest is currently paying over 4%.
I
close this post by noting that any view on the market and stocks on any
particular day may change the in the future days to come. That is why
we watch and see how our views match up with the reality of the time.
But trying to look ahead a few months into the future may be a way to do
things. If you think too deep about world events and the recent
alliances forming, projecting ahead can be a dicey endeavor. With all
the above caveats and attempted prognostications, I will close this
post.
Stay tuned for more opining on the market and stocks to watch.
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This site does NOT make Buy / Sell recommendations.
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