Powell Delivers – Indices Diverge – Mega Cap Tech Lagging
Fed Chair Powell did not disappoint. He was brief and clearly confirmed that rate cuts were coming without offering the cadence. I was a bit surprised that markets hadn’t already priced that in since 95% of participants expected it. With the 2-Year under 4% and short-term rates above 5% there is plenty of room into 2025 for the Fed to juice the economy. The billion dollar question will be if it’s too late or more ammunition for the soft landing. […]
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Date: August 26, 2024
Powell On Tap With Dovish Songs
With the stock market’s winning streak ending a few days ago and Thursday being down moderately, will the media run crawls on screen today that stocks have been down two of the last three days? Will it be “BREAKING NEWS”? Today is Fed Chair Jay Powell’s annual speech from Jackson Hole, Wyoming. It has been on the calendar on all year. I expect it to be brief and dovish, but not offer cadence on how rate cuts will unfold. The […]
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Date: August 23, 2024
Finally A Down Day – Sentiment Back To Greedy
The stock market finally had a down day, albeit a small one where the damage was seen in the mid and small caps. The media can stop with the nonsense about how many up days in a row the S&P 500 has seen. The bottom line is that momentum has been strong and some thrusts off of the mini-crash low on August 5th have been triggered. While that’s relatively unimportant for the short-term, it does typically insulate the stock market […]
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Date: August 21, 2024
Earthquake Or Rogue Wave – A Look At 1997 & 1998 For Clues
Continuing on the theme I mentioned on Friday about an earthquake or rogue wave, I went back to the two international events that caused these in the 1990s. The first chart below is from 1997 when the Asian currency crisis hit in October. On that day in October the Dow Industrials saw their single largest point decline in history. Of course, on a percentage basis, it didn’t rank all that high. After an all-time high in early October and a […]
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Date: August 19, 2024
Early or Wrong?
The stock market has had a strong rally, at least price-wise since the earthquake 11 days ago. My thesis has been for several more aftershocks over the ensuing weeks and possibly longer. One thing I cannot argue with is the acceleration in what I have labeled as a bounce. I also have said that I would be surprised if the stock market went straight back to new highs. Aside from one aftershock last week, the bulls have powered ahead unabated. […]
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Date: August 16, 2024
Big Run Up – Sell a Higher Open
The rally off the earthquake low 9 days has been impressive price-wise, but anemic volume-wise. It looks like an absence of sellers versus an abundance of buyers. I have used the rally to reposition some portfolios and reduce exposure in others. I continue to believe there are more aftershocks coming later this month and in September. The securities that worry me the most are the ones that fell into last Monday’s mini-crash, but haven’t rallied with the market. We have […]
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Date: August 14, 2024
Healthy Pullback & Unimpressive Bounce So Far
I noticed that the S&P 500 has been down four straight weeks while still in an uptrend. That doesn’t happen all that often, but it is a plain vanilla pullback in a bull market. From peak to valley on a closing basis we have seen the major indices correct: Dow Industrials -6% S&P 500 -8.50% S&P 400 -8% Russell 2000 -10% NASDAQ 100 -12% When we downgraded our 1-3 month market view I said I did not expect a 10% […]
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Date: August 12, 2024
Aftershocks Continue – Looking For Volume & Great BBQ
After Monday’s earthquake we saw a solid aftershock on Wednesday as stocks gave up a big bounce back gain to close moderately lower. Thursday reversed the reversal with 85% of the trading volume coming on stocks going up on the day, a good sign. However, as you can see in the chart below all the way on the right, the rally has come on diminishing volume which is a warning sign. Another “however”, this is not unusual. It’s the next […]
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Date: August 9, 2024
Monday Was An Earthquake – Aftershocks Coming & Then All-Time Highs
Monday changed a lot of things in the stock market. You can call it a mini-crash or a woosh or an earthquake. One thing is for sure, days like that, especially after historically low volatility regimes, can shake investors’ confidence to the core. People react emotionally and usually not in a good way. They sell when they should be holding or buying. My thesis has been very clear. We downgraded the stock market over the 1-3 month period. We sold […]
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Date: August 7, 2024
Bad News Is Now, Well, Bad News – Markets Manic
On Friday, the employment report showed a gain of 114,000 new jobs in July. The unemployment rate rose to 4.3%, its highest level since October 2021. Both were weaker than expected. However, market reaction was a whole lot worse than those numbers would have indicated and that suggests more selling on Monday, perhaps even high magnitude selling. For all those crying for a rate cut, thinking it would just propel risk assets higher, bad economic news is now bad news […]
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Date: August 5, 2024
