Is Inflation Becoming Yesterday’s Battle?
September 12, 2022 Good morning, After 3 consecutive weeks of sheer punishment for the equity market following the Jackson Hole speech by Chair Powell in August, sellers took a break last week and the S&P 500 Index rebounded +3.6%. Maybe last week’s rebound wasn’t just seller’s fatigue. About two months ago, the economics group at […]
Morning Note
September 8, 2022 The price of oil has settled down this morning following its -7% decline yesterday. It was yesterday’s drop in the price of crude that finally provided some relief to stocks and bonds on the day. Futures are off a tick this morning on a lighter than expected U.S. Initial Jobless Claims number, […]
August 2022 Monthly Letter
The U.S. Central Bank spent most of the first half of August furiously messaging markets that any dovish interpretation of their recent (July 27) FOMC meeting would be a MIS-interpretation. For the first half of August, investors didn’t seem to care what the Fed was messaging – the June-July rally marched onward and upward. Then, […]
The Three R’s
September 7, 2022 Good morning, In S&P 500 Index terms, in round numbers, the market fell 24% from its all-time high in January of this year to its recent low in June. There were two relief rallies during that six-month period that failed to arrest the selling that resulted in the worst first half of […]
Is It September Already? Ugh!
August 31, 2022 Good morning, It sure is hard to find a Bull – anywhere. While such extreme sentiment is not enough of a reason to buy, it does suggest we are probably not facing another waterfall decline as we head into September – the worst performing month historically, and the only month showing negative […]
Now What
August 29, 2022 Good morning, Friday’s 8 min speech in Jackson Hole by Fed Chair Jerome Powell seemed to be largely a reiteration of his prior messaging – perhaps more forthright – but it hardly represented a significant change in the course of the Chair or the Fed. And yet, the S&P 500 was down […]
One Interpretation of the Market Message
August 19, 2022 Good morning, Readers of Wednesday’s Morning Note were understandably dissatisfied with what I described as diametrically opposed signals from bearish macroeconomic gauges and bullish technical signals (commonly referred to as the Tape), and the resulting neutral allocation recommendation. One reader compared the analysis to the classic two-handed economist – one the one […]
Still Neutral
August 17, 2022 Good morning, It is rare, using the Technical/Quantitative Methodology (TQM) of market analysis, that every indicator across all four fields of analysis – macroeconomic, fundamental, technical and behavioral (sentiment) – align perfectly. Hence, the weight-of-the-evidence approach. Conflicting information is a feature of TQM, not a bug or shortfall. However, rarely has the […]
Health Check
August 15, 2022 Good morning, After four straight weeks of rally for the equity market, much of its oversold condition has been worked off. In fact, short-term, daily indicators of sentiment (trading tools really) have now moved into overbought territory for the first time all year. I think at a minimum, we can expect some […]
Neither?
August 12, 2022 Good morning, Recall the stock market’s ability to handle last week’s blowout employment numbers without breaking stride. This week, it took Wednesday’s better than expected inflation news and ran right through its overhead resistance level just below 4200 on the S&P 500 Index. Now what? Our now month-old equity rally continues to […]
A Good Number But Still Just One Number
August 10, 2022 Good morning, It’s one of those myopic days today for investors, a morning lacking market imagination or insight. The big inflation number was released this morning. July CPI data came in surprisingly good vs expectation – market moves are almost always driven by the printed data vs expectations. The absolute value of […]
This Rally is No Slouch
August 8, 2022 Good morning, Fed speakers spent the first four days of last week tying to push back against the market’s dovish interpretation of the recent rate hike. Friday’s blowout employment data for July finished the job for them. Fixed Income market participants reset their expectations back up to a +75-basis point rate hike […]