Technology sectors were higher last week, as many of the hottest sectors took major drubbings.  This underscores the point that investor should invest to win, and not craft portfolio designed not to lose, because when the pain comes, it comes for all names most of the time.

Momentum Derailed

This is wild,- on a three-month basis, the number of names above 50-day moving average has dwindled dramatically.  Its means opportunity but also means market could potentially be more volatility.

Bond Market Still Not Getting Growth/Inflation Memo

The ten-year yield is now in a pattern of lower lows and highs.

Meanwhile, the two-year yield moving higher means the curve is flattening = signaling slower economic growth.

Bank of America is the latest firm moving their target for crude oil to $100.00 a barrel next year as demand outstrips supply.  I think this is probably right even as other parts of the commodities super cycle stall and pullback.

A glaring problem is the drastic decline in oil rigs with the count to 373 (up 9 last week) from 888 on November 16, 2018.

Transportation Losing Altitude

FDX reports June 24^th and it has to be a good one to get transportation out of its nosedive.

Today’s Session: March of the Fed Soldiers

James Bullard stirred the pot and now it’s up to Jerome Powell & Co to follow through by either confirming the notion of a rate hike in 2022 or make it clear the St Louis Fed President (Bullard )is just one -non-voting- dot and not representative of consensus. 

There is no shortage of Fed speakers this week, including Fed Chairman Jerome Powell who testifies before Congress on the Federal Reserve's Response to the Coronavirus Pandemic.  Powell’s appearance before the Select Subcommittee on Coronavirus Crisis, U.S. House of Representatives will offer a chance to clarify if Bullard is his proxy, and whether he agrees the next rate hike will be in late 2022 not 2023 like the dots suggest or 2024, which is where Powell had been aiming for.

Monday	Tuesday	Wednesday	Thursday	Friday
Bullard Kaplan Williams	Mester Daly Powell testifies in Congress	Bowman Bostic Rosengren	Bostic Harker Williams Bullard Kaplan Fed street tests	Mester Rosengren Williams

The week begins with two of the most hawkish members of the Fed speaking at 9:45, so keep an eye out for headlines.

I also saw headline that Yellen, Powell, and Gensler will meet with President Biden today, as well.

Right now, the Fed is increasing asset purchases.

Growth versus Value

Suddenly, growth is racing past value, which isn’t surprising to me, although there are opportunities I would call “value” in all parts of the market. Measuring and assessing these values is predicated on the type of company in question.

This morning indications slightly favor value but that could change very quickly.

Portfolio Approach

We are adding to Energy in our Hotline Model Portfolio.

 

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