The View From Fifth Avenue

It was a bad day for chipmakers after it was reported the Biden administration was considering restrictions that would limit ASML’s ability to service its tools in China. The rule that the US is considering is seen as severe by many allies and could impose controls on any foreign products that use US technology. This move is far from confirmed but US officials plan to speak with other foreign representatives about their growing concern over China. As a result, Adv Micro Device (-10.2%), Applied…

Earnings + FOMC Implied Rate Cuts + Return of the Small Caps + US Presidential Elections equals up and to the right for US equites!

Another UP day for US Equities. The stats are impressive, so let’s take stock. 9 out of 10, or more broadly, 18 out of the last 26 sessions for the S&P500 have ended in the green. Today narrowly missed clocking a record-breaking 38th new all-time high this year on a quiet fade into the close from the mid-morning highs amidst a rather ‘mundane Monday’… UP days have, however, become the new status quo. Expectations are now tipping the scales rather decidedly for a 25bps rate cut in Sept to 91…

The doves really took yesterday’s CPI to heart as an opportunity to show some love to previous laggards as evidenced by a major mean reversion (enter: the Russell 2000) that carried on into today’s session, undeterred by a hotter PPI reading. The data showed an increase from 2.2% to 2.6% YoY and a rise in core PPI from 2.3% to 3.0% while the odds of a September rate cut sit comfortably near 90% according to the CME Group FedWatch Tool. On the whole, economic data has been encouraging (borderlin…

I’m not a huge soccer fan but can drum up a healthy interest during the sport’s biggest events. And it doesn’t take much to get caught up in a ‘moment.’ Exhibit A: last night The Killers were performing at the O2 but put their show on pause as the English national team tried to advance to the Euro finals. Immediately upon scoring the go-ahead goal with little time to spare, as the venue went bonkers, the band immediately launched into Mr. Brightside. To say the vibes were at an all-time high wo…

This is a big week for the markets and so far, investors have received what they are looking for. Powell’s testimony to Congress has alleviated some questions about if rate cuts are coming as he acknowledged yesterday that inflation was not the only concern the Fed had. While he did not dial back his conservative dovishness today, he adeptly did not put a time frame on when he thought that first rate cut may come. CME futures continue to price September as the date (70% expectation), but by now…

The summer heat continues to rise here in New York City and so do main US Indexes, with both the Nasdaq and S&P 500 closing at another all-time high. There wasn’t much to talk about on the street today as traders prepare for Thursday which will give us June CPI data and kick off an eagerly awaited earnings season. Chairman Powell was on full display this morning while testifying in front of the Senate banking panel. While he refused to comment on future policy decisions or movement, he did give…

As firework celebrations come to a screeching halt with US Independence festivities behind us, it’s back to markets! At a glance, this week has quite a few tidbits we can hang our hats on, starting with the surprise win by the Left in the snap French elections (may cause concern ahead of coalition talks), alongside President Biden squashing rumors earlier this morning of him stepping down as the democratic party candidate. All in all, US markets seemed unphased however with FOMC Chair Jerome Po…

A bit of a head-fake to shake things up this morning as headline NFP came in ahead of expectations (206k versus 190k expected) amid a revision lower for both April and May. Though labor market data isn’t a zero-sum game, it’s worth contextualizing as the two prior months were revised lower by a total of 111k whereas the June data was only 16k ahead of consensus. Additionally, the unemployment rate ticked up to 4.1% (vs 4.0% expected) and wage inflation down to 3.9%. Despite an initial (and mome…

These mid-week holidays really wreak havoc on volumes—now the second of its type in nearly as many weeks—but does little to dent performance!! US Equities resumed their ascent to close at yet another record-high with the S&P closing above 5500 and NDX breaking the 20k glass despite depressed volumes ahead of a half-day session tomorrow before markets will be closed entirely for the Fourth of July on Thursday and will again reopen for Friday trading. This morning we heard from Fed chairman Pow…