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Afternoon Note

Tight Range

By Charles Payne, CEO & Principal Analyst
8/22/2019 1:51 PM

The market is trading in a very tight range ahead of tomorrow’s Federal Reserve confab in Jackson Hole Wyoming where Chairman Powell will give a much-anticipated address.

He is in a real tight spot after several policy mistakes, communication errors and inability to influence his colleagues.  On that note Fed, officials talking today, including rate-cut dissenter Esther George, are still reluctant to provide accommodation.

Those comments pushed yields, resulting in another temporary inversion of two- and ten-year treasuries. 

The market is on edge and needs a jolt of confidence from the Federal Reserve.  There are several reasons to cut rates that have nothing to do with the strength of consumers and I’m worried George and others will wait for signs that read like rearview mirrors: object is a lot closer than it appears.

Manufacturing

The flash manufacturing report from HIS Markit today revealed the first contraction in a decade (September 2009).   In addition to headline read of 49.9, there were other red flags.

IHS Manufacturing

United States Manufacturing PMI

The market wants to go higher but continues to run into a buzz saw at key resistance points.  It needs a catalyst and looking for Powell to come through tomorrow.


Comments
Some political participants have desired and tried to influence a recession to influence up-coming elections. In your opinion are Ms. George or any others of the Federal Reserve Board letting their political opinions influence their rate decisions?

Douglas V Eatough on 8/22/2019 2:18:32 PM
your first guest today STEVE finally someone not stuck in 20th century its not your father market

garry brewer on 8/22/2019 3:06:05 PM
 

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