Interest Rates, Inflation, and Earnings – Oh My!

I have this spooky feeling.

Bank of Canada is going to raise interest rates 0.75% on Wednesday of this week – from 1.5% to 2.25%. That seems pretty certain. Canada needs to keep up with the Americans in this respect.

The US CPI numbers will be released on Wednesday. We will have to see if the number is higher than the last time, about the same, or shows a bit lower. The consensus seems to be that the US Federal Reserve will continue raising rates in July, regardless. Jobs data is still strong, and so the economy really isn’t feeling the impact of an economic slowdown yet which is what the Fed is trying to achieve. It could be another 0.75% upward move, from 1.75% to 2.50%.

And US earnings season for the second quarter starts this week. A few banks release their earnings on Thursday, Friday, and next Monday. And then we start to get the usual big-name suspects like Netflix, J&J, AT&T, etc that will show us if earnings are starting to slow down. We’ve still got supply-side problems in China rippling out to the rest of the world, rising prices, rising interest rates, and other things getting in the way of companies making as much money as they can.

Oil prices have been falling for the last 3 weeks, but many people still believe they end up higher eventually because the world is not reducing its dependence on oil. Maybe I should broaden into a wider set of commodities.

I wonder if I should step out of some of the riskier stocks for a month. Or step out of all stocks.

Get out of FNGS, get out of NIO, get out of financials, get out of oil stocks… just side-step this whole season and come back in late August…

I am not a market timer, I am not a day trader, I am not a swing trader… Say that on repeat…

But it’s scary times for sure.