The View From Fifth Avenue

If yesterday’s month-end could be categorized as “mean reversion of the mean reversion,” today’s performance displayed an overextension of that very same mean reversion. In other words, stocks crumpled. Two economic numbers— weekly jobless claims and manufacturing ISM— stirred up anxiety that the goldilocks/soft landing scenario has quickly gone south. The manufacturing ISM dropped to 46.8 (2 full points below Street consensus). And all the critical demand/growth indicators slumped, includi…

“Mess with the bull, you get the horns.”

US Equities finished mixed to slightly up with arguably the busiest week of summer upon us with major central bank decisions, key economic data and earnings all on deck. Olympic swimmers aren’t the only one’s diving in, shall we?….Looking ahead on the global macro, tomorrow we receive US Jolts, China’s PMIs, and BoJ rate decision (narrowly expect 15bp hike). Wednesday, we have our US FOMC meeting (unched expectation, paying attention to language around 25bps cut due in September), and the Eur…

A bit of a recovery today for the major indices, as investors continued to contemplate the on/off rotation out of tech/semis, as well as a ton more earnings reports, most of which were fairly robust this morning. In terms of macro news, PCE data was generally as expected and consumer spending remained healthy enough, though US consumer sentiment eased to an 8-month low. All the data underscored the soft-landing scenario playing out and reinforced the belief that next week The Fed will lay the g…

So, you want a recap huh? Some insight as to what happened today? Well, it sort of feels like a bit of everything happened today. The ongoing earnings avalanche along with seismic shifts in rotation from crowded trades to ones that are less so; or in the words of one client “…there is no shortage of good stocks getting sold & c**p stocks getting bought this week…” Markets were pummeled yesterday, at least it LOOKED as such but under the covers, 1/3 of the S&P 500 was actually green on the big…

All good things ultimately must come to an end. The S&P 500 had not fallen 2% in 356 days, until today, as a confluence of events led to an acceleration of the risk off/ rotation that have been in the markets since July 17th. By the end of today, the S&P 500 closed -2.31%, Nasdaq -3.64%, Semis -5.41%, Mag 7 -5.33%… you get the point. Perhaps more worryingly is that the major indexes (except the Russell 2000) also closed below their 50-day moving averages, as the calendar heads into month end…

Watch and wait were the directives for today. US Equities mostly tread water at/above the breakeven throughout the session before drifting to the lows into negative territory in the final 20minutes as we awaited Alphabet and Tesla earnings after the bell to give us Big Tech’s first look at an updated bill of health (spoiler alert: you might not want to hold your breath…). With depressed summer volumes taking hold, a rather “interesting” US political backdrop afoot into elections, the Fed in t…

“Head on the swivel” as they say in sports or when simply walking throughout the bustling streets of Manhattan, it is the same approach we must have towards markets during the current environment. As we ALL received the alerts on our phones yesterday afternoon/evening regarding President Biden bowing out of the race….our heads must remain on a swivel as we undergo unprecedented times during US politics, while managing Q2 earnings (according to FactSet 138 SPX companies are set to report this we…

It’s been an interesting week for US equities, and despite another all-time high for the S&P500 on Tuesday and positive breadth improvement, the past three closes deep in the red serve as a stark reminder that change, or in this case rotation, can be painful. In terms of what sparked such the seemingly sudden shift – prevailing market sentiment has turned decidedly dovish in the past few weeks. It’s widely known but sometimes overlooked that the goal of the Fed is to be boring. Yes, they will b…

The British Open kicked off this morning and the allure of this tournament fairly often is the impact weather can have on the tournament (in UK golf parlance, this means poor conditions i.e., wind/rain). Without that exogenous effect, the courses can be a bit docile. Markets have been without much ‘weather’ for long stretches this year and we’ve seen new all-time highs being set fairly frequently. That has changed of late, with rate cuts expected soon, a significant rotation at play and a fresh…