"Warning Flags Are Everywhere": Kenny Polcari On The ECB, Inflation And U.S. Stocks
"We've gone from 'transitory' to 'prolonged' inflation..."
Friend of Fringe Finance and well known financial news contributor - as well as 38 year veteran of markets Kenny Polcari has been kind enough to share his most recent thoughts on the market with our readers.
I’ve been lucky enough to be friendly with Kenny for about a decade now, and he was the first guy to ever take me on what I can only describe as an unauthorized tour of the NYSE trading floor, where I got to personally tell several confused specialists and market makers that the Chinese names they were trading were frauds that didn’t even exist.
The tour didn’t last as long as I would have liked, to say the least. But I’ve always appreciated Kenny’s willingness to welcome people into his busy world for nothing in exchange, and his decades of experience, which gives you a pulse on markets that only time can help you recognize.
For those who aren’t familiar with Kenny or don’t recognize him from TV, he is Managing Partner of Kace Capital Advisors, Chief Market Strategist at SlateStone Wealth, and a Managing Director at Campfire Capital a boutique investment bank. He started his career on the floor of the New York Stock Exchange (NYSE) as an institutional broker back in the early eighties when the march of electronic trading was already taking its first steps, and the great bull was first learning to run.
The post has been lightly edited for punctuation and grammar.
Kenny On Retailers Warning
Target warns of threats to their profits (again)! Remember, 3 weeks ago after they missed on their earnings, they lowered guidance and yesterday they made sure to make it clear that they are warning you again.
Target [is] cancelling orders from vendors and will be forced to offer discounts in order to clear unwanted goods. Well, of course, you have to offer discounts for ‘unwanted goods’ - why would anyone pay top dollar for something they don’t want?
What is interesting is they are not offering discounts on what you need. Look, during the pandemic when everyone was stuck at home and the government was sending you money (whether you needed it or not), there was a rush to buy all that stuff: patio furniture, athletic wear, pillows and other home décor stuff. And now that the world is open and you are not locked down, people want services and necessities: think travel, dining out, working out and food and gas.
If you walk around your local Target, you will not find any deals on food, or cleaning supplies, soaps, detergents, or stuff you need. But if you need more outdoor furniture or a polyester track suit, you are in luck!
And so, it went [on Tuesday], the whole retail sector taking it in the gut in early trading, taking the broader market lower in the first few minutes as the cable news channels dissected the headline: What would it mean? Was this a new crack in the foundation or was it just more of what we already knew? My sense is that it just caused more confusion and at least, for Tuesday, it was not that much of a concern – because after about 5 minutes – the ‘panic’ was over….and traders/investors took all of those [retail] stocks up – in fact the XRT ended the day up 0.7%!
Kenny On Janet Yellen
And then [on Tuesday] we had Treasury Secretary Janet Yellen telling us that we should prepare for a ‘prolonged period of inflation’: wow!