Morning Commentary
It was an interesting session that began on the back foot and tumbled hard and fast out of the gate yesterday, as buyers sat on the fence restrained by too many false alarms to be tempted. While few were seduced by the 10-year Treasury yield dipping under 3.00% - that didn’t pass - and neither did equity buying, although major indices finished well off the lows of the session.
Market breadth was simply abysmal.
Market Breadth |
NYSE |
NASDAQ |
Advancers |
1,280 |
1,886 |
Decliners |
2,015 |
2,830 |
New Highs |
12 |
18 |
New Lows |
342 |
532 |
Up Volume |
1.10 billion |
1.75 billion |
Down Volume |
3.73 billion |
3.80 billion |
Defense sectors continued to attract buyers, while value investors lifted Industrials (XLI) into the plus column.
First Half a Wrap
June 30th was washed in red with defense contractors rallying on hopes of a modern-day arms race.
First Half (1H) 2022 was devastating, save for the oil patch and swathes of Health Care (XLV).
The Fed Doesn’t Understand Inflation – What About Recession?
Early last month entertainer, Cardi B posted a tweet that got 131,000 ‘likes’ asking about an impending recession. She wanted to know when “they” would announce we are going into a recession. But she won’t get that answer from the Jay Powell & the Federal Reserve, or Janet Yellen at the Treasury Department. Both have said that since this question was posted, they haven’t seen any evidence of a recession.
Another Sighting?
It was an interesting reply since the so-called Fed Beige Book saw a monumental spike in mentions of a recession. Now, the Atlanta Fed is modeling the second quarter to be -1.0%, which would be back-to-back declines. And for the most part, that is considered a recession. “They,” being the National Bureau of Economic Research (NBER), will timestamp the start of the recession after it’s run its course.
Atlanta Fed Gross Domestic Product (GDPNow) estimates for 2022: second quarter (Q222), growth rates, and changes.
Portfolio Approach
There are no sector weighting changes this morning to our Hotline Model Portfolio.
Today’s Session
Its dead out there ahead of the three-day weekend and one of the worst first halves of the year for the investing world.
More than $30.0 trillion has vanished around the world, as there were few safe havens, and “winners” like commodities have been slammed recently.
Copper is at 17-month low.
Bracing for more bad news from companies, but keep in mind, so much is already built into the stock market, a lot of the headlines will not be new.
The bears have the soapbox and momentum and its best to let stocks get even more oversold.
All eyes are on central banks, especially the Fed, but the market is modeling for rate cuts early next year – which assumes the Fed overdoes it and then has to come to the rescue.
So much for the Federal Reserve Act of 1913 and the promise of no more boom and bust.
Tweet |
7/2/2025 1:44 PM | Materials' Strength Continues |
7/2/2025 9:38 AM | BARNBURNER |
7/1/2025 1:29 PM | Rotation |
7/1/2025 9:45 AM | FEAR OF MISSING OUT IS CREEPING IN |
6/30/2025 1:24 PM | Steady As She Goes |
6/30/2025 9:54 AM | SUMMER RALLY STARTS |
6/27/2025 1:35 PM | Reaching New Heights |
6/27/2025 9:39 AM | THERE'S MORE! |
6/26/2025 1:10 PM | S&P Approaches Record |
6/26/2025 9:51 AM | CHIPS MOMENTUM CONTINUES |
6/25/2025 1:42 PM | Tech Stocks Power Nasdaq 100 |
6/25/2025 9:47 AM | CLIMBING MOUNTAINS OF WORRY |
6/24/2025 1:47 PM | Peace Rally |
6/24/2025 9:48 AM | PEACE THROUGH STRENGTH: THE MARKET LOVES IT |
6/23/2025 1:47 PM | Getting Some Resolve |
6/23/2025 9:51 AM | BRACING |
6/20/2025 1:29 PM | Second Triple Witching |
6/20/2025 9:38 AM | POWELL BLEW IT |
6/18/2025 12:41 PM | FED Day |
6/18/2025 9:45 AM | ROOM WITH A VIEW |
6/17/2025 1:26 PM | Tension Continues |
6/17/2025 9:50 AM | THE BIG TECH TEN & CO |
6/16/2025 1:34 PM | Fears Subside |
6/16/2025 9:44 AM | DRUMBEATS OF PEACE |
6/13/2025 1:30 PM | Showing Resilience |
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