ANGLES.

There are three main factors that have propelled the S&P 500 higher in 2024 .. i) solid economic data, ii) impending Federal Reserve interest rate cuts, and iii) AI enthusiasm. Last week provided challenges for all three of those narratives. With key earnings reports, central bank interest rate decisions taking place in Washington DC, London and Tokyo and a pivotal Jobs Report, it always looked li...

With Biden finally realizing last Sunday that he needed to walk the plank, the Democrats swiftly clearing the runway for Harris and the resulting shift in the election narrative, Wall Street’s prior assumption of a comfortable Trump victory in November was thrown into some doubt. It always had the potential to be a volatile week anyhow with a flood of Q2 earnings reports, including from some high...

Despite the politically consequential events in Pennsylvania the weekend before, the assassination attempt appeared not to have been that much of a game-changer on Wall Street since a Trump victory in November had been pretty much assumed already and was then simply priced in more strongly than ever over the course of the week. But there were plenty of other factors in play during what ended up be...

The surprising outcome of the French parliamentary elections the previous day, where the left, centre and right all essentially cancelled each other out to create a legislative power vacuum and potential political deadlock in France for years to come, caused nervousness and volatility in European markets on Monday , which continued for much of the week. With such a big slate of upcoming potential...

Following the car crash of a presidential debate and an apparent outbreak of civil war in the Democratic party, Wall Street strategists and traders have already begun gaming out how an increasingly-likely Trump victory in November will look , especially as it was further enhanced by Monday’s Supreme Court decision on presidential immunity. As one analyst put it; “It’s still too soon to fully price...

Last week saw the end of the month, Q2 and H1. As I will summarize next week in my Q2 Quarterly Report, stock indexes broadly did ok over these periods, but last week confirmed that some two-way volatility is creeping into the Mega Tech names that have carried this eight month rally. The highlights of the week were always going to be the presidential debate and some big inflation data on Friday, b...

Stocks moved cautiously higher in a bifurcated week, with the S&P 500 achieving its eighth weekly advance from the last nine and ending up just south of all-time record levels, but tech stocks started slumping later in the week, particularly AI-related ones. With a jam-packed week coming up in terms of important economic data releases, there are some concerns that any disappointments could trigger...

Last week was all about Big Wednesday, with pretty limited price movements on any of the other four days. Interest rate cut sentiment has now swung back to more hopeful again, with the futures-driven expected number of interest rate cuts this year moving up from one to two. This was in the same week that the Fed moved its own projection of the number of 2024 cuts lower from three to one. Huh? The...

Last week provided a perfect example of how you can create any narrative you like simply by cherry-picking data. The glass-is-half full crowd needed to look no further than central banks around the world last week starting the interest-rate cutting cycle, job openings data showing an orderly resumption of pre-COVID labor market normality backed up by stats showing unemployment at an economically-i...

The melt-up momentum in U.S. stocks since late October of last year is showing signs of faltering after a mixed four trading days ended a five-week winning streak. It may be dawning on investors that “higher for longer” interest rates might be undergoing a rebrand to “higher for the foreseeable future” . There’s certainly not very much right now that is serving to create any sense of urgency for t...

Last week’s narrative was dominated by Nvidia’s earnings , which ended up being a splendid story. Markets in general, however, were flattish for the week, as investors seemed to lurch from one side of the canoe to the other, suddenly concerned again that interest rate cuts could be further away and less frequent than previously thought. The most popular futures market-driven scenario now sees no i...

It was a fourth straight week of higher stock prices with markets in a sweet spot right now as recent data has shown that growth is slowing but still positive, corporate earnings and outlooks are proving to be very strong and disinflation may have slowed, but it has not stalled. This is also a market that once again seems to be happy talking itself into the idea that the Fed is going to cut intere...

Another positive week for stocks mostly came about exclusively because of last Monday’s favorable price action. The indexes then barely moved from Tuesday through Friday on a lack of impactful economic data releases and fewer interesting earnings reports. Continued improving optimism about the timing and frequency of Fed interest rate cuts in the afterglow of the previous Friday’s Goldilocks Jobs...

Last week saw a pretty dismal month of April finally come to an end with most indexes suffering a >4% loss for the month, the first monthly setback of the year. But stocks enjoyed a second consecutive week of higher prices after a wild ride that navigated some big earnings reports, a Fed interest rate decision meeting and a Jobs Report. The bulls remained in the driver's seat from the previous wee...

The Federal Reserve remains in a holding pattern, circling the airport until a safe runway opens up on which to land the plane, following an absolute deluge of earnings reports and important economic data last week. Stagflation , anyone? Use of this rather scary term that is reminiscent of a 1970s stock slump is probably premature at this point, but the chances of a “worst of both worlds” outcome...

Interest rate cuts are beginning to look like a mirage ; the closer we seem to get to them the more they seem to recede into the distance. By the end of last week, the most likely Fed interest rate at the end of the year according to futures markets was 5.125% (see FEDWATCH INTEREST RATE TOOL below). With Fed Funds currently sitting at 5.375%, this now implies just one solitary Fed rate cut of 0.2...

In the end it proved to be a rotten week for U.S. stocks. A geopolitical shadow hung over markets the whole time with American officials warning of an imminent Iranian reprisal for Israel’s recent deadly air strike against a consulate in Syria, which kept the price of oil very perky. Meanwhile domestically, the big news was more hot inflation data and a slowly-emerging troubling concern about the...

Despite a valiant comeback effort on Friday, stocks endured a mostly jittery week and ended lower as some generally-accepted market narratives began to shift. Good news for the economy is finally becoming good news for stocks. The S&P 493 (without the so-called Magnificent Seven) is finally looking in good shape relative to the S&P 500 (which is dominated by the Magnificent Seven) and, according t...

Stocks edged ever so slightly higher in a rather uninspiring, holiday-shortened week that brought a spectacular, record-filled first quarter to an end, but the weekly gain was almost entirely due to a solid performance on Wednesday. This was the fifth quarter out of the last six that both the S&P 500 and the NASDAQ-100 have advanced. Bizarrely, the week's biggest and most important economic data p...

Wall Street was in a very optimistic mood last week, boosted by a highly positive take on the outcome of the Fed interest rate-setting meeting on Wednesday and its quarterly “Dot Plot” projections. AI confidence continued to thrive and the process of global interest rate cuts finally got under way in Switzerland. The upshot was the best week of the year so far for stocks. Nvidia’s Developer Confer...

It was a jittery week for stocks during which data was released that confirmed that the American consumer may be putting the brakes on spending and that the rate of inflation is decelerating at a slower pace. Markets chose to focus on the fact that stickier inflation likely means higher for longer when it comes to interest rates and that drove stock prices lower for the second week in a row. After...

Stocks took a long road to nowhere , ending the week right back where they started it - with a sharp fall and then a solid comeback rally with yet more new all-time highs reached at one point. In the end, however, the S&P 500 just missed out on achieving a 17th week of gains out of the last 19. Markets floated gently lower without real directional conviction on Monday , with a lack of any real cat...

It was more of the same. For the second week running, stocks played a nervous waiting game for the first three days of the week, afraid of being disappointed by some data that was coming out on Thursday. Then, also just like the week before, when the data proved to not be as bad as feared, stock markets got bought up nicely on Thursday and Friday to end the week with gains and yet more new all tim...

There was only one name on Wall Street’s lips last week; chipmaker Nvidia , the last of the Magnificent Seven stocks to report Q4 2023 earnings on Wednesday evening. The first part of the week was spent in fear of the firm failing to meet strongly-enhanced expectations. Thursday was one big Nvidia-inspired celebratory party after it blew through those expectations and markets spent Friday nursing...

After having risen for 14 of the last 15 weeks, the S&P 500 fell a smidge last week. It basically went on a wild ride to nowhere, driven mostly by messy economic data . There were two signals that inflation isn’t dying as quickly as markets (and the Federal Reserve) would like and there was also a sign that the prolific American consumer may finally be starting to close their wallet a little, all...