Never say the fed doesnt matter. Another pivot and another turn. We expect the fed to cut rates in either June or July. Markets repairing some of the recent damage. We will know more by how things pull back when they pull back. But not this morning. Even with continued talks on tariffs, market is up pre-market.
Speaking of tariffs. There will be no 25%, no 20%, no 15%, no 10%…maybe we get 55 for short term but no chance it goes further. That’s our thoughts and will stick to them. We know. We know this president is different but he knows what happens if he goes all in on this. But again, dont worry. The fed is to the rescue once again…not for the economy but for markets.
Somewhat of a mega-cap tech slaughter yesterday off of potential investigations. They got the FB, AMZN, GOOGL but also got all the leading software names…where a bunch are no longer leading.
Of course, an “on purpose” word of easy money by Fedhead Bullard stanched some of the bleeding. If nothing changes, we expect a rate cut as soon as this month’s meeting but more likely the end of July.
Things gapping up today off of very oversold conditions. Keep in mind, all major indices are BELOW the 200 day average here.
GOLD and GOLD STOCKS are emerging again. We shall see if it lasts. This asset class has teased before to no avail.
Interest rates are the big story as the 10 year closed at 2.081 and the 30 year amazingly down at 2.548. Yields are very oversold. If yields bounce up, expect financials to bounce up.
Bulls would rather have the market open down and then rally but will take anything this second. Remember, throughout all corrections, the fed comes to the rescue. Looks like they telegraphed it again yesterday. Every time they have made a move, it has helped markets.
Last week, yuck. Last month, yuck.
The only thing emerging right now is GOLD and GOLD STOCKS as they came up the right side on heavy volume Friday.
Markets are deeply oversold but oversold can become more oversold. Of course, we also have to deal with the next tweet and maybe the next tariff. The latest…he president was about to apply tariffs to Australia.
We do not rationalize. We deal in price and with major indices below the 200 day average, not a good thing.
Go slow. Need to see some accumulation first…and right now, ain’t happening.