For those wondering what I've been up to and why I haven't posted in a couple weeks, I just got back from a vacation in the Caribbean with my family. Instead of broadcasting to the world my home would be empty before leaving (don't want to invite the robbers ;)) I figured I'd just let everyone know when I got back. Here's a photo from our trip:
Now back to business.
In today's video I cover the recent market drop (about 3% the past week) and the coming Sequester. For those not familiar with Sequester, it's basically a series of budget cuts slated to begin this Friday that have been pushed down the road ever since the Debt Ceiling was raised in 2011. Unless something changes between now and Friday, $1.2 trillion in cuts will start to be phased in over the next 10 years.
As I've mentioned in previous market update videos, the market has been chugging along in a nice up channel for a few months, and dropping a few percent to the bottom of the channel is entirely to be expected. A real drop could happen, but I think the next major move (whether up or down) won't start until after the start of March.
Regarding Sequester, I'll be updating my Recession Probability (RPA) model tomorrow and should have quite a bit more information about the budget cuts and their potential impact at that time.
Without further ado, here is today's video update: