News
Proceed with caution

By Michael O’Connor, theislandinvestor.com
Stock Market Surge
Last week we saw a considerable rally in the stock market. On Thursday, lower-than-expected inflation figures were well received, resulting in the largest one-day rally in over two and a half years.
Although US inflation remains near its highest level since the early 1980s, the latest monthly Consumer Price Index report brought some relief. Inflation rose at an annual 7.7% rate in October - down from 8.2% in September. This was enough to push the NASDAQ up more than 8%, while the S&P 500 added 6% for the week.
So as improving inflation numbers push markets higher, should investors be jumping in headfirst to avoid missing yet another market rally?
Not quite.
Not Out of the Woods Yet
In the last two years, we have seen rapid market recoveries play out at breakneck speed as Monetary support, ultra-low interest rates, and fiscal stimulus all conspired to drive markets higher.
In simple terms, when money is free, and governments are hell-bent on continuously printing more and more of it, asset prices increase.
This exuberance pushed prices and valuation multiples to questionable highs. Now, however, the money printer has been turned off, and interest rates have increased dramatically, leaving us in a far less supportive environment. Unsurprisingly, asset prices have fallen accordingly.
This recent pullback has stripped out much of the excess from markets, leaving stocks trading at much more attractive prices.
Household names such as Google, Microsoft, Amazon, Tesla, Disney, Nike, Netflix, and Facebook have fallen between 30% and 75% in recent months. Now, the entry points into some of the best companies in the world are much easier to digest. This is welcome news for investors with a long-term outlook. But over the short term, it is vital to realise that many of these names are trading lower for a reason.
It can be tempting to assume that we will return to all-time high valuations now that inflation is starting to turn and markets have stripped out much of the excess in valuations. However, as we stare down the barrel of falling earnings, slowing economic activity, a less supportive monetary policy and persistent inflation, it would be naive to think that it’s all upside from here.
The positive momentum from last Thursday’s inflation print will fade, leaving market participants wrestling with the looming recessionary pressures.
Taking all the above into consideration, I believe the stock markets will remain within the 10% range it has traded in over the last month. This is likely to result in volatile horizontal trading over the coming weeks and months as positive moves due to falling inflation give way to market declines as earnings growth continues to slow.
Summary
The market appears to be moving past its overwhelming obsession with inflation, but unfortunately, this paves the way for all new worries. The slowing economic activity that is allowing inflation to fall in the first place now becomes enemy number one. Softer demand will lead to lower spending, leading to lower earnings which should theoretically lead to lower stock prices.
Unfortunately, the ferris wheel of worry continues to spin.
Considering all the above, I believe the stock market will remain within the 10% range it has traded in over the last month. This is likely to result in volatile horizontal trading over the coming weeks and months as positive moves due to falling inflation give way to market declines as earnings growth continues to slow.
Over the long-term, opportunities are more plentiful than ever as valuation multiples improve but for those expecting to make a quick buck over the coming weeks and months, proceed with caution.
If you have any questions reach out at www.theislandinvestor.com, I'm always happy to help.
News
Eight month wait for a driving test in Killarney
A Killarney councillor is calling for action in an effort to reduce the driving test wait list in Killarney The current wait list for a test in Killarney sits at […]

A Killarney councillor is calling for action in an effort to reduce the driving test wait list in Killarney
The current wait list for a test in Killarney sits at eight months.
Cllr John O’Donoghue raised the issue at Monday’s full meeting of Kerry County Council.
He proposed that driving instructors should be employed to carry out the final test to reduce the current backlog.
At Monday’s meeting he asked that hat Kerry County Council would write to the Minister for Transport to ask him to consider giving driving instructors temporary powers to issue a temporary Driving Licence/Certificate of Competence to those on the waiting list for tests.
“The wait is currently far too long and the system is in danger of becoming completely overwhelmed,” he said.
“The huge waiting list for young drivers is well documented at this stage. In a case I am familiar with, a young person passed their theory test in January 2022 and he immediately applied for his mandatory 12 driving lessons. When these were completed, he applied for his driving test on the 2nd of December 2022. Some weeks ago, he still had not received an application to apply for his driving test. This wait is placing him and his family under considerable extra cost and stress which is completely unacceptable.”
In the course of his research into the matter Cllr O’Donoghue discovered that the next available date for a driving test in Killarney is May 25, 2024, while Tralee is June 3 2024.
“Bear in mind, these are only the dates on which you receive an invitation to book your test, the test itself will then be an estimated three to five weeks later.
“This is an appalling situation and one which needs to be rectified as a matter of urgency. I am proposing that driving instructors, which presumably are fully trained up on the rules of the road, be granted temporary powers to be allowed to issue temporary driving licences to young people. When the waiting list time has been reduced, I would still propose that these people sit the test as usual, but the current pressure needs to be alleviated as soon as possible. There is precedent as I believe that in the 1970s, a cohort in this country were issued driving licences without having sat a test as the wait time for the test was too long.”
News
Ballymac charity vintage run on October 1
The Ballymac Vintage Club is hosting a classic car, tractor and Honda 50 run on October 1. The run will leave from and return to the Halfway Bar, Ballymac. Registration […]

The Ballymac Vintage Club is hosting a classic car, tractor and Honda 50 run on October 1.
The run will leave from and return to the Halfway Bar, Ballymac.
Registration begins at 9:30am and sets off at 11am.
“There will be two separate routes with one for tractors and the other for cars and motorbikes. Proceeds on the day are in aid of Castleisland Day Care Centre and we’ll have plenty of spot prizes to giveaway too in the morning,” said the club’s PRO Kieran Glover.
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