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After one of the biggest and fastest rate hike cycles in history, the Federal Reserve is all set to begin the unwinding of restrictive monetary policy of the past two years. Investors are pricing in a near certainty that we get our first rate cut tomorrow at the conclusion of the Central Bank’s September meeting…. Read the full article.
August ended with a great rally off the lows seen at the beginning of the month. Incredibly, all the major indices finished in the black after starting the month down more than 5% in just a few trading days. Bonds also rallied as yields fell in anticipation of the Federal Reserve’s meeting beginning on September… Read the full article.
We have seen some choppy markets over the past week as both stocks and bonds tried to find equilibrium after the big rally since the August 5 bottom, and ahead of Fed Chairman Powell’s speech on Friday. The Federal Reserve meets each year in Jackson Hole, Wyoming for its annual retreat. Investors have been waiting… Read the full article.
Well, just as quickly as the market collapsed two weeks ago, it has now rebounded to recover most of those losses. I have included charts of the Nasdaq 100 (QQQ) and the S&P 500 (SPY) for a visual of what I am talking about. QQQ as of August 16, 2024 via Stockcharts.com: SPY as of… Read the full article.
I hope everyone is keeping perspective during this the current market selloff. I believe this correction in mega-cap technology (and by proxy the other market-cap weighted indices) is long overdue. The Nasdaq is down almost 15% in just a few weeks and has brought the S&P 500 down with it. This was inevitable in my… Read the full article.
We mentioned the long overdue rotation out of tech a couple of weeks ago and the likelihood that we would see the large market cap weighted indices (SPY and QQQ) suffer a pullback as a result. These indices have been the beneficiaries of the big tech AI phenomena for the past year and are now… Read the full article.
Stocks have moved higher over the past week, once again led by “Big Tech”. Bonds and corresponding yields have mainly stayed put. All this has occurred as investors waited for the release of Thursday’s June CPI report. Analysts were predicting a further drop in inflation compared to May (MOM or month-over-month) and this time last… Read the full article.
On Friday, we got some good news on the inflation front with a lower than forecast PCE report. This should have caused bond yields to drop and bond prices to rise. Stocks of all types should have followed suit with interest rate sensitive sectors like real estate, dividend payers, small caps and the like leading… Read the full article.
We are seeing some rotation out of tech, which I commented on last week. To me, this is necessary and gives us a chance for the market to broaden and other sectors to catch up. Simply put, one horse (no matter how big) cannot pull the weight of the world forever. On the economic front,… Read the full article.
We are starting to see some weaker economic data trickle in – a surprise drop in inflation data and higher jobless claims last week. This week we saw weaker than expected consumer spending (finally) and elevated jobless claims again. While we are still at historic lows in unemployment, claims are increasing. All this means the… Read the full article.
This past Friday, we got a very strong non-farm jobs number, yet unemployment overall ticked higher to 4%. This presents a bit of mixed messages on the economy, and the all-important interest rate situation. On one hand, businesses are still hiring, yet it appears to be limited to certain sectors. The headline employment rate has… Read the full article.
This week we have seen continued backfilling (selling) by the main stock indices. This is not unexpected after the jump up we saw earlier in the month. The S&P 500 and Nasdaq remain above their respective 50-day moving averages while the Dow has broken down and is now well below it. This disparity is due… Read the full article.
This week we have seen the broad stock indices take a break and pull back following the recent bounce back above their 50-day moving averages. Bond yields have crept higher as well. The correlation between stocks and bond yields is no coincidence and is the result of continued restrictive Fed (the Federal Reserve) policy (high… Read the full article.
Well, just like that stocks (the main indices) bounced back to reclaim their respective 50-day moving averages last week. Over four short trading days, investors put a technical end to the correction that began one month ago. Bonds have seen some daylight as well, with the 10-Year Treasury yield falling back below 4.5%. It seems… Read the full article.
The past few days have seen a deluge of earnings data as well as the conclusion of the Federal Reserve meeting. Earnings continue to come in above estimates, but we are starting to see some cracks, most notable in big tech and the AI darlings. As everyone knows this niche of the economy has carried… Read the full article.
Last week we saw two sets of conflicting data points. Earnings are coming in above expectations, which is good, and inflation is also coming in above expectations, which is bad. The Fed’s preferred PCE report hit the wire Friday morning and showed a rise of 2.8% year over year. The expectation was 2.7%. Month over… Read the full article.
The market correction continues in the face of the reality that rate cuts are likely not on the way anytime soon. We have seen three straight months of sticky inflation, coupled with a red-hot economy and a very strong job market. It is obvious that the tail risk right now is higher inflation, not a… Read the full article.
Investors got the March CPI numbers yesterday (Wednesday) morning and unfortunately, they came in above expectations pretty much across the board. The rising inflation we saw in the January and February data appears to be a trend – and a trend in the wrong direction. Prices for rent, insurance and other swaths of the economy… Read the full article.
Last Friday we got the PCE inflation report, and it was “in line” with expectations. This followed two reports (CPI and PPI) earlier in the month that were hotter than expected. I was worried that another similar report would be the catalyst for higher bond yields and a correction in stocks. The reason is two-fold…. Read the full article.
Stocks are closing the first quarter of 2024 on solid footing. Tech has continued to outperform, and high beta sectors have beaten low beta sectors. The last couple of weeks have seen some rotation, which may reflect that tech has gotten ahead of itself and there is some value (and less risk) in other places. … Read the full article.
