You know, every now and then.

I think you might like to hear something from us.

Nice and easy

But there's just one thing.

You see we never ever do anything.

Nice, easy

We always do it nice and rough.

So, we're gonna take the beginning of this song.

And do it easy.

But then we're gonna do the finish rough

This is the way we do "Proud Mary."

Jay Powell and company continue to be wedded to rate hikes with the same vigor as Tina Turner singing “Proud Mary.” Common-sense recession indicators are flashing hot and bright. There is no way to avoid them, including the Institute of Supply Management (ISM) Manufacturing report. The pace and depth of a pullback are at levels that have always ushered in a recession.

Perhaps the biggest red flag was the 18% decline in overtime from a year ago.

Robust Quarter on Shaky Ground

For weeks, we marveled at how robust the first quarter of the Gross Domestic Product (GDP) was shaping up.  According to the Atlanta Fed’s GDPNow tracker, on March  23^rd, the GDP stood at 3.5%, then a series of economic data point misses began chipping away. Yesterday’s ISM was a fatal blow.

Nice and Rough

 

Last week, JPMorgan (JPM) determined a hard landing is already baked into the cake. A Recession is the number one concern among professional investors.

 

Proud Powell needs to let the market know he’s paying attention.

Session Wrap Up

Yesterday, the S&P 500 eked out a gain on the Energy (XLE) show. Interestingly, traditional safe haven sectors (Utilities (XLU) and Real Estate (XLRE)) were down on the session. Buyers were seeking opportunity and no ports in the storm.

Heat Map

The oil patch stands out, but buyers kicked tires in retailers, drug companies, payments, and Consumer Staples (XLP).

Portfolio Approach

There are no sector weighting changes in our Hotline Model Portfolio this morning.

Today’s Session

Waiting for the JOLTs report, which is the most flawed of all these flawed government data points.  That said, the talking head will be all over the place, and given a chance, will try to spook the market.  They missed this rally big time and must trip it up to get in without underperforming – again.   Don’t let them spook you out of the greatest money-making machine in history.

Sector Watch

There might be some bottom fishing in Financials – we are looking around but not trying to be first.

I do not think it will impact the market but watching the Trump indictment show.  I’m no lawyer but this stinks badly and will further divide the nation.

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