tsptalk's Market Talk

[tsptalk]

As I mentioned in another thread, it can take at least 6 to 18 months for an interest rate cut to impact the economy outside of the quick change to loan rates, etc.

They say the stock market is a forward looking indicator. When stocks are going up it is because it is looking down the road and not what is happening now. When the good data starts unfolding into the economy down the road, i.e. growing labor market, etc., we'll probably get a "sell the news" reaction.

The fact that there was already a 97% chance of a rate cut at this month's meeting, any rally today could be vulnerable. It was priced in. But they are now pricing in 2 or 3 cuts more aggressively.

December meeting probabilities:

 

[tsptalk]

The gap up rally triggered by the jobs report quickly hit a wall and the reality of the weakening labor market may be creeping in. Was this a 'buy the rumor, sell the news' on rate cuts - now that the probability of a 0.25% cut has reached 100%?

 

[nasa1974]

The gap up rally triggered by the jobs report quickly hit a wall and the reality of the weakening labor market may be creeping in. Was this a 'buy the rumor, sell the news' on rate cuts - now that the probability of a 0.25% cut has reached 100%?

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The "C" fund didn't fare well, but the "S" & "I" funds held their own. So, what can we expect next week???

 

[tsptalk]

Stocks are mixed this morning although mostly higher, at least for the large caps. Small caps are lagging despite yields being down slightly again.

The S&P 500 is reacting surprisingly positively to Friday's negative reversal day, but that sore thumb is sticking up and could turn out to be a temporary peak, although most charts are looking good and the trend is up.



We have some important inflation data coming out this week, the PPI and CPI will be out on Wednesday and Thursday respectively, and that will feed into next week's FOMC meeting and decision on interest rates.

Now we're talking 0.25% or possibly 0.50% after the weak jobs data last week.

Gold, oil, and bitcoin are all up this morning.

 

[tsptalk]

Yields and the dollar are up this morning putting some pressure on stocks, particularly the small caps.

The S&P 500 is off a bit after a positive open, and Friday's high is still the intraday high. Still no pullbacks of 3% or more since April but the S&P has been consolidating some with the index only up about 1% from that late July highs and the current levels.



The PMO momentum indicator is still showing a negative divergence, but that has been going on for two months with little effect.

Oil is up, gold and bitcoin are flat.

We get the PPI report tomorrow and the CPI on Thursday.

 

[tsptalk]

Will this be the first close below the 50-day EMA in a month for the Transports?