For the sixth week in a row, the market moved less than 1.0%, the longest streak since 2019. A few more weeks like this, and scientists may add a ‘tip’ to stop yawning. Stop watching the market.

Yet, the stock market is often more riveting when it’s ‘boring’ because of all the jockeying beneath the surface and all the anxiety that hangs above like a dark cloud.

Remember one of Wall Street’s oldest adages: “Never short a dull market.”

This can also be taken to mean that perhaps investors should be buying a dull market.

Dull & Defensive

It was a dull week for the market, which finished Friday with gains in traditional safe sectors, but only Communication Services (XLC) and Consumer Discretionary (XLY) were higher on the week.

The week’s hodgepodge of ‘winners’ was based on individual developments, not macro events.

Recession vs. Inflation

The battle for the top narrative continues to move the market, but the tug-of-war might explain why major indices have traded in narrow ranges. On the recession front, metals and mining stocks are breaking down.

And commodities are in full retreat.

Meanwhile, mentions of inflation during earnings calls are also coming down swiftly.

Transitioning to a recession from a massive inflation without breaking more things is a tall order that, thus far, the Fed is ignoring. 

Lots of Fed speakers this week, including Jay Powell, but we have to wait until Friday to hear from him. More than likely, this jawboning will move markets more than scheduled earnings releases and economic data.

Portfolio Approach

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

Today’s Session

Lots of scuttlbutt about a debt ceiling deal – we’ll see.  Meanwhile, the Empire Fed Manufacturing report is another disaster, -31.8 against consensus of -3.9.

Playing the waiting game.  Hold tight.

Comments

According to Tom Petty.....the waiting is the hardest part. robert brush on 5/15/2023 9:41:34 AM

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