Bank Failure, Bank Runs and Images of 2008
As I mentioned on Friday to those who receive our regular blog updates, markets had two giant pieces of news to digest. First, Silicon Valley Bank (SIVB) was put into receivership by the FDIC and then we had the February employment report. I thought I was going to spend this post on the latter as it’s the biggest economic report of the month and would offer clues on what the Fed would be doing next week when they meet again. […]
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Date: March 13, 2023
Bears in Control as Market Waits on Big News
Lots of market moving news this morning. The monthly jobs report will be out at 8:30am and while I do not have a strong view on the number, I do think that last month’s crazy good number will be revised lower. We also have news on Silicon Valley Bank about a capital raise gone wrong. That is never a good thing for a bank and raises solvency issues. I vividly remember Bear Sterns in 2008. On the Friday before they […]
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Date: March 10, 2023
Powell Rained on the Parade
It’s always interesting from week to week and month to month when the markets react to Fed Chair Jay Powell’s various speeches and Fed minutes. He and the Fed have been clear on the path for interest rates, yet the reactions have been all over the map. On Tuesday Powell spoke and reiterated that we would see higher rates for longer. This time after a two-day market rally, stocks basically gave back the rally from the second day. Mid and […]
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Date: March 8, 2023
Hating, Disavowing and Fighting the Rally
For all the complaining I do regarding Mother Nature, it would be rude and disrespectful if I did not thank her for the 15 inches of snow she dropped on us Friday night and Saturday morning in Vermont. So, thank you kindly! On Friday I wrote about the bulls battling back precisely at the time when the bears were about the declare victory. The same thing happened in December as well as last October. While the masses are all disavowing, […]
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Date: March 6, 2023
Bulls Battle Back Right on Cue
Over the past week I have been pointing out that I wanted to see stocks gather themselves and the bulls take charge again. I didn’t want to see much more than a 5% pullback as that would open up further downside. On Thursday the stock market did collect itself after a rough morning that took the S&P 500 below the February lows. By the end of the day we saw strength and a nice reversal. But we need to see […]
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Date: March 3, 2023
Bulls Need to Gather Themselves Quickly
Let me start off by reiterating that nothing has changed in my outlook on the first half of 2023 or the full year. However, I cannot say I am exactly excited about how stocks have behaved lately. While I do not think it’s anything cataclysmic they do need to start gathering themselves and quickly. A move for anything other than a day below last week’s low would open the door for lower prices and likely give up all of 2023’s […]
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Date: March 1, 2023
Bears Make More Noise – Some Key Actions for the Bulls
The stock market returns from its worst week of 2023 with a higher opening indicated, not exactly what I wanted to see after last week’s drubbing. I would much prefer a lower open that exceeds Friday’s low, stabilizes and then gathers some steam into lunch. The risk is always that the opening range is the high for the day and then sellers come in strongly. The S&P 500 is below and you can see how it rallied to my horizontal, […]
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Date: February 27, 2023
Bears Testing The Downside
The stock market continues to absorb the latest barrage of hotter than expected inflation news from the CPI, PPI and PCE this morning. While stocks and bonds have pulled back, the dollar has rallied. As was my theme in Q4, the stock market needs a softer dollar (see chart below) and 2-Year and 10-Year that do not make new highs for a durable bottom to remain. Right now, that thesis is being tested. The 10-Year yield is below and it […]
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Date: February 24, 2023
Bears Work Not Done – Bonds Key
On Friday the “risk on” markets put in another solid showing in the face of hotter economic news. Any day other than a Friday and I would have been more excited that a little low was forming. Fridays are notoriously poor days to establish a bottom. Markets come back from a nice, three-day weekend with the bears looking to do some damage with pre-market action showing a move beneath Friday’s low. That’s not exactly the warm and fuzzy the bulls […]
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Date: February 21, 2023
2-Year & Fed Funds in Harmony Today
More hotter than expected inflation came in on Thursday and several Fed heads were out in the media reinforcing their higher for longer message. While the 2-Year has bounced this month it is currently sitting right on the Fed Funds Rate, meaning temporary perfect equilibrium. The next thing to watch for is when the 2-Year hits 4%. That will confirm the rate hike cycle is officially and firmly over. I expect to see that next quarter. I also want to […]
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Date: February 17, 2023
