It is the end of the Chinese growth miracle and leader Xi seems fine with that.
— Wall Street Journal
The Magnificent Seven stocks had a market cap of $13.2 Trillion at the end of January, 3.4 times the value of the entire Japanese stock exchange.
— Valuation
Hermes has raised the cost of its Birkin Handbag to $11,400 before sales tax. Birkin’s handbags, made with exotic skins, like crocodile, have increased 20%. Prada’s Galleria handbag is 85% more than in 2019, now $4,600.
— Wall Street Journal
There’s no fear in the market. People really don’t seem worried about any downside.
— Cantor Fitzgerald
All markets do not top at the same time. If they did, investors might notice. The Shanghai topped in early 2021 at 3,700. It has fallen to 2,700 and now bounced to 3,000.
Major indexes in the U.S. and other western countries topped first in late 2021, dropped, and are now at new highs. NYC and Florida condos are trading at new highs as are the handbags belonging to the Realtors closing those deals. Social mood is high regarding just about everything.
Meanwhile, a North Carolina restaurant which priced its cheeseburger at $8.50 in 2018 now must charge $12.50. Takeouts cost the owner another dollar for packaging. Plastic forks are optional. This is why Bidenomics has not resonated with the public.
Team Biden is choosing to run on the Walter Mondale’ 1984 platform to raise taxes. Team Biden seems to think corporations will absorb the 15-21% proposed tax increase, decreasing bottom line for their stockholders and creditors. No they won’t, corporations do not pay taxes, their customers pay them. He complains of their price increases, and then suggests raising taxes.
West Texas Intermediate is still trying to have a weekly close over $81. Apache (APA) and a leveraged energy ETF, DIG, are also trying to break resistance. Let’s examine a few other energy plays.
Transocean (RIG) is trading at 40% of book value. Warren Buffet likes companies with a moat around them, meaning it is near impossible to match their assets or market share. No one else has the experience or number of offshore rigs like Transocean. Current price is $5.18, down from $8.75 last September.
Patterson (PTEN) has more workover rigs in Texas than any other company. It has been trading at book value since March 2023. From last September at $16, it dropped to $10. It gapped up in February and is now $12.06.
Energy service giant Halliburton (HAL) in the same period dropped from $43 to $34 and is now $36. Volume is increasing.
I continue to expect the stock market to hold up past April 15. I am patient on the energy sector.
