Plenty of factors are shaping up to make for a long winter in the markets.
Investors have gotten worried about some of the Biden administration’s proposals for increased IRS oversight of bank accounts, and cryptocurrencies continue their volatile run.
“Not helping matters are these moves in commodities,” Tim Collins wrote recently on Real Money. “Why? Well, the higher prices are showing more staying power than a transitory status. Oil continues to press to new highs. The good news is we aren't in driving season, but we are approaching the fall and winter holiday travel season.”
While there is still some time before the busiest part of the travel season hits, “we need to keep an eye on oil and natural gas. Airlines have already been crushed under the weight of COVID. Add in surging fuel costs and things could get bleak in quick fashion. Oil and natural gas at highs won't help consumers either as the cost to heat one's residence is going to eat into disposable income. The best part is we're combining this with an administration likely to hike taxes.”
In addition “we haven't even mentioned the backlogs in shipping and the higher costs in that sector weighing on retailers bringing in goods from overseas via cargo ship… Unfortunately, the negative impact on those for many consumers and businesses is growing. It's not on every person or every business, but nothing ever is.”
All together, these problems have created an atmosphere of uncertainty… and the stock market does not tend to do well during periods of high uncertainty.