Futures are down to flat this morning and regardless of why, it makes sense for the market to take a few days to digest a 6% move higher with several all time highs. Companies are producing huge amount of cashflows even with prices moving higher. It’s going to be difficult for the Fed to maneuver through their mandates. There is a significant amount of demand that will cause supply constraints for a longer than expected time. What does that mean? it means that inflation, transitory or not, will be with us for some time to come. Eventually, it will impact consumers, but on the other hand, constraints on the supply side will provide reasons to innovate even more, which is disinflationary. It’s really not a bad scenario for a free market society. So I always like to think positive and while there will always be worries, the overall prospect for those of us who are so fortunate to be able to participate in a free market society, allows us to keep smiling!
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