News
And just like that, everything changed

By Michael O’Connor
I spoke last week about the fragility of the most recent upward trend in markets.
We are in the interlude between inflation peaking and economic data slowing, a momentary sweet spot if you will.
Well, the interlude is over, and the sweet spot is no more, ground to a shuddering halt by a direct and concise message of intent from Fed chair Jerome Powell on Friday.
“While higher interest rates, slower growth, and softer labour market conditions will bring down inflation, they will also bring some pain to households and businesses. These are the unfortunate costs of reducing inflation but a failure to restore price stability would mean far greater pain.”
In short, don’t be surprised to see more market volatility and economic pain as interest rates continue to rise in an effort to cool inflation.
Sometimes pain is for the greater good, apparently.
Outlook
After clawing back over 50% of their losses, stocks are at a crossroads.
As we move away from inflationary woes toward economic growth concerns, market uncertainty will most likely result in back-and-forth trading with no clear direction in site.
As I mentioned previously, the V-shaped recoveries we have come to know and love over the last 2+ years are far less likely.
The liquidity and support that fuelled previous reversals are now being stripped out of markets. Fundamentals will continue to be reset to account for this.
Expectations will need to be moderate as we enter a period of slower growth.
My Predictions
None of the major asset classes looks overly attractive in this market over the short term.
Stocks and bonds continue to reset, and the point of entry remains unclear given the risks that remain.
With that said, buyers remain on the sidelines and using any pullbacks as a chance to top up on high-quality stocks with strong free cash flow is advised.
Although fundamentals are being reset as future earnings get revised downwards, many of these high-quality names are more profitable than ever and have the capital on hand to buy-up market opportunities where they see fit.
Funding these purchases by reducing your positions in non-profitable growth is also advised.
Many of the pandemic high-flyers will continue to bleed out.
Supply/demand issues should keep oil prices elevated over the medium term but expect considerable volatility. Some high dividend energy companies should provide some attractive yields in the process.
Bonds continue to add to their allure as the equity risk premium gets reduced, but interest rates have yet to reach their ceiling. With that said, the 10-year Treasury at 3.5% seems like a solid entry point to build up long-term exposure.
While I believe that interest rates will be higher for longer, I don’t believe that rates can remain elevated for very long, making treasuries an interesting investment.
The current aggressive Fed policy that brings interest rates to these higher levels will initiate an economic slowdown that is only alleviated by reducing the very rates that caused the slowdown in the first place.
And round and round we go.
For free weekly stock tips and direct access to my personal investment portfolio, go to www.theislandinvestor.com.
News
Ireland’s oldest citizen has Killarney connections
Ireland’s oldest woman met with President Michael D. Higgins at Áras an Uachtaráin this week. Máirín Hughes, who turned 109 on May 22 has strong Killarney connections. The previous record […]

Ireland’s oldest woman met with President Michael D. Higgins at Áras an Uachtaráin this week.
Máirín Hughes, who turned 109 on May 22 has strong Killarney connections.
The previous record was held by 107-year-old Nancy Stewart who died on September 10 2021.
Although born in Belfast, Máirín went to school in the Mercy Convent. Her father was a customs and excise officer and the family moved around a lot eventually coming to Killarney after spells in County Down and Dublin.
Her mother came from the Rathmore area and her father was from Newmarket in County Cork.
She attended the Mercy Convent and has, in previous interviews, recalled growing up on the shores of Lough Lein.
“Neighbours who had three children were given the job of taking me to school,” she said. “They were annoyed because the children were going to school for two or three years but I was put in to the same class as them – my mother had taught me.”
In 2021 she featured in the book ‘Independence Memories: A People’s Portrait of the Early Days of the Irish Nation’, sharing stories of being kept in school in Killarney during an attack on the RIC barracks down the road.
In 1924 she started a degree in science and a diploma in education at University College Cork, before working in the pathology lab in University College Cork’s Department of Medicine for 16 years.
last year she recalled her story on the podcast: ‘Living History – Irish Life and Lore’.
During the broadcast she talked about her parents’ membership of the Gaelic League in 1910; the Spanish Flu in Ireland in 1918; The Black and Tans in Killarney in 1921; the early days of the new Free State; Eucharistic Congress in Dublin in 1932, visiting the Basket Islands in 1929; and working in the UCC medical laboratory from 1932 until 1948.
This week President Michael D. Higgins hosted an afternoon tea event to celebrate the important role that a variety of people have and can play in different communities and Máirín was among the guests of honour.
News
Philip is running over 100kms for Cancer charity
Local runner and charity fundraiser Philip Kissane is set for the biggest challenge of his career as he lines up for the Cork City Marathon on Sunday. Phillip has already […]

Local runner and charity fundraiser Philip Kissane is set for the biggest challenge of his career as he lines up for the Cork City Marathon on Sunday.
Phillip has already completed four half marathons at various locations around Killarney – all in aid of Kerry Cancer Support Group – or the Cancer Bus as it popularly called.
This is the second time that Phillip has run four half marathon and an official race for the charity.
Back in 2021 he finished with 5km Run Killarney event but his finishing race this time around is over eight times the distance at 42kms.
“We are delighted with Philip’s continued fundraising support but also with his awareness raising for the charity,” Breda Dyland, Service Manager Kerry Cancer Support Trust.
“We are getting busier all the time and still get no statutory funding so are dependent on fundraisers like Philip’s to keep us on the road. We have just put our new wheelchair accessible bus on the Cork route so Philip’s funding will be going towards the operation of this vehicle.”