Morning Commentary
It was an exciting session, with Communication Services (XLC) stocks leading the charge. Energy (XLE) was the second biggest gainer yesterday, but it had no individual names in the top ten. But there were many in Technology (XLK).
This market's resolve has been remarkable-maybe too good to be true.
Who Needs an Accommodative Fed?
The rally has ignored the potential for fewer rate cuts, but we need the Fed to be smart.
Fed Chair Jay Powell spoke at Stanford University’s Business School yesterday and tried to walk a thin high-wire.
He has put so much confidence into three rate cuts this year that the issue of credibility, which never went away, is being raised.
I agree with his contention that the inflation fight is ‘not done,’ but I worry about some of his other comments (I’ll let the charts be the rebuttals).
POWELL: I DO THINK MONETARY POLICY IS WORKING
POWELL: MONETARY POLICY IS TIGHT
POWELL: TOO SOON TO SAY IF RECENT INFLATION DATA MORE THAN A BUMP
POWELL: INFLATION WASN'T STRICTLY FROM DEMAND OVERHEATING
Today’s Session
Yesterday seemed nonchalant, but there was a serious game of risks and reward below the surface, which played out more in the bond market than inequities.
The ADP jobs number came in better than expected and that nudged yields higher. The first-rate cut seems predicated on an unexpected hit to the labor market, so this news disappointed.
Then the ISM report came in below consensus, but prices paid growth slowed considerably, and the bond market breathed a sigh of relief.
But there was still a fair amount of anxiety that only Jay Powell could ease.
And he did.
Back to rooting for bad news on the jobs front.
Initial Jobless Claims
The number was the highest in two months, which coupled with a new narrative that many immigrants that got jobs in the last two years do not qualify for unemployment insurance, means the actual number is a lot higher.
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7/26/2024 1:36 PM | Friday Recovery |
7/26/2024 9:29 AM | WRAPPED AROUND YOUR FINGER |
7/25/2024 12:58 PM | A Look at GDP |
7/25/2024 9:57 AM | TURNING THE PAGE ON RESOLVE |
7/24/2024 1:49 PM | Vulnerable Market |
7/24/2024 9:47 AM | Mega Misses |
7/23/2024 1:04 PM | Lay Summer Session |
7/23/2024 9:25 AM | MOST EXPANSIVE BREADTH = GREATER OPTIMISM |
7/22/2024 1:23 PM | Rebounding |
7/22/2024 9:47 AM | WILL THE HUNT FOR VALUE CONTINUE? |
7/19/2024 1:32 PM | Under Pressure |
7/19/2024 9:56 AM | STAR FOR ONLY A WEEK? |
7/18/2024 1:30 PM | All Eyes on Netflix |
7/18/2024 10:18 AM | BIG BETS ON TRUMP TRADE |
7/17/2024 1:37 PM | Technology Troubles |
7/17/2024 9:59 AM | EMPHATIC! |
7/16/2024 12:44 PM | AI Drifting Lower |
7/16/2024 9:52 AM | NEW KIND OF WINNING |
7/15/2024 1:32 PM | Small Caps On The Move |
7/15/2024 9:50 AM | FULL SPEED AHEAD |
7/12/2024 12:56 PM | Intriguing Small Caps |
7/12/2024 9:48 AM | IT’S GOOD TO BE THE KING |
7/11/2024 1:25 PM | Equal Weight Comeback? |
7/11/2024 9:42 AM | CALLING ALL STOCKS |
7/10/2024 1:15 PM | Rally Broadens |
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