Market Talk
The market continues it's trading seemingly unaware of the geopolitical dynamics of a growing cold war between China and America not to mention an all out effective war with Russia over the Ukraine. The banking crisis of three banks not being able to cover deposit withdrawals has at least temporarily subsided due the federal reserve statements that deposits are covered even beyond the $250,000 FDIC limit. While stemming the fear of banking risk, it sent a message to the markets as to the core value of the dollar as printed by the government.
With banking risks increasing in Europe as well, the overall skepticism of Fiat money has bolstered hard assets such as gold. Concurrent bullish sentiment to crypto currency such as Bitcoin has triggered a breakout to recent new levels at the $30K range. Recall that bitcoin experienced a fall from grace when it peaked in the $60 K range. The tumultuous world events of threatening war skies over Taiwan is not helping to increase confidence in any government backed fiat currency. Many of the younger generation views crypto such as bitcoin and ethereum as a form of liquid gold that has no national alliances.
Meanwhile on the energy front, OPEC recently announced a planned ten percent cut in oil production starting in May. The oil and natural gas stocks with domestic fields have leveled from their swoon down on recession slowdown fear. The price of oil and gas has bounced accordingly. I believe that Opec is cutting production largely because they project a global recession slowdown is coming and therefore it may be a prudent move on their part to stabilize their product pricing on the basis of less demand. When people lose jobs, they don't drive as much for example.
The democrats are doing everything possible to get us into electric cars. But that puts us more dependent on China because they control the majority of mines that have the minerals needed for batteries. America has enough oil and natural gas for hundreds of years and the manufacturers have made cars more fuel efficient. Yet, the democrats want to force us into electric cars by government mandates. This is a wrong headed approach for America in my view. Also natural gas is a clean burn that should be used more for powering energy plants to supply the electric grid. Our grid can not support everybody driving electric cars. The democrats solution of installing giant wind mill fields up and down the east coast out in the ocean is killing the whales as they wash up on beaches all over. Never mind that ! - say's the New Jersey democrat governor.
Stock Talk
My previous post highlighted a few small starting position that I am trying in
Devon Energy (DVN): At present, pays 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 traded it in the 70s and I bought a small position recently here 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 miner RIOT: I have opined in market talk about bitcoin surging to the $30 K range. If such a trend continues, it seems RIOT may be positioned to benefit. The appeal is that RIOT mines bitcoin and holds over 7,000 bitcoin and growing and is a leading bitcoin miner with high monthly tallies. I like that 7000 bitcoin X 30 K is $210 million fiat dollars of US currency. If bitcoin continues higher as some predict, RIOT has a lot of room for upside imho. Still, this is purely speculation and as such is a gamble. How anybody trades this info is at their own discretion and risk
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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