Well, it’s off to the races again this week, with the Nasdaq outperforming, up 0.8%, the S&P 500 +0.3%, and on track for another record close, while the Dow is clinging to the flatline.  

Despite the gain, only 4 of the S&P 500 sectors are currently in the green, with Technology leading the way, and Energy the laggard.   Bullish comments on Nvidia (NVDA) are driving the stock up 2% in today’s session and lifting AI stocks.

Breadth is decidedly positive, and new 52-week highs continue to outpace the new lows.

Yields are on the move again after Atlanta Fed President Bostic commented, “our new steady state is likely to be higher than what people have known over the last decade – maybe back to where we were in the 1900’s and 2000’s.”  Furthermore, as it relates to only one cut this year, he added, “nothing has changed.”  The 10-year Treasury is up to 4.45% today after hitting 4.33% last week.  We will continue to get more information as the week progresses with the release of the FOMC minutes as well as appearances from a few Fed officials.

Additionally, Michael Barr, the Fed Vice Chair for Supervision, stated that the central bank should keep rates as is until inflation hits the Fed target. 

Gold is on the move today, hitting a record of $2,440 an ounce.  Despite all the Fed speak, there is still optimism rates will be cut soon.  That coupled with geopolitical tensions, including the uncertainty surrounding the death of Iranian President Ebrahim Rasi this weekend in a helicopter crash, is causing the precious metal to surge.

Now, the prediction for a cut in September is down to 62% and November is down to 74% from 77%.

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