New Energy Weekly – Notes from the Fed

The Federal Reserve continues to dominate market sentiment

The notes from the Fed’s June meeting were just released. They showed investors that sentiment remains poor. There is a good chance that the Fed will raise interest rates again in July or August. 

That news may put a lid on investor sentiment. And that could dampen demand for stocks over the next couple of weeks.

So far this year, the S&P 500 rose 15% and the TSX Venture Index, the Dow Jones Industrial Average for junior mining stocks, rose 9%. You can see its chart here:

The anticipation of another hike in interest rates means we could see some selling in the interim. It could offer an opportunity to add to an existing position at a lower price or to take on a new position at a good price. 

This market continues to be dominated by short-term thinking. Market sentiment careens from one Fed meeting to another, without taking a longer view. That is what gives us a great investment opportunity.  We know that this too shall pass. 

Our largest risk remains the threat of recession. However, the fundamental data, like jobs and consumer spending, remain strong. That gives us some confidence that even if we do have a recession, it should be short lived. 

However, in the short term, the market is waiting. 

Good Investing,

Matt Badiali