I have said it before, and I will say it again: I am not a huge fan of the broader market at these levels.
While the recent banking turmoil has raised the possibility that the Federal Reserve would cut rates soon, I think we have a better chance of the Cincinnati Reds winning the World Series this year—which is to say: it is not impossible, but the math of the situation and a healthy dose of common sense indicates that it is highly unlikely.
But that doesn’t mean there aren’t some bargain stocks to buy today.
Let me show you one…
The recent 25-basis point hike from the Fed appeased those who thought no hike would be a vote of no confidence in the economy and those who believed a 50-basis point hike might pour gasoline on the carefully manufactured banking crisis. It also bought the Fed an extra six weeks to examine the data and see what path inflation is taking as we move into summer.
More rate hikes are not off the table.
Even if rates remain level for the rest of the year, stock market valuations have not yet priced in all the previous hikes.
The market is currently trading at about 22 times reported earnings which is well above both historical averages and previous market bottoms.
Even after the recent selloff, the returns from market indexes are unlikely to be the stuff of academic dreams.
I am finding bargains among select…
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