There seemed to be a good deal going on behind the equity scenes this week. And although today was the end of the S&P’s winning streak, it was the longest streak since Nov ’21 (just 10 sessions between breaking above 4,200 & 4,400). Further, the Nikkei saw its 10th straight week of advances. Today stocks sprinted out of the gates but quickly ran out of steam. The moves were seemingly due to positioning, with the massive triple witch expiration seeing $4.2 trillion in contracts mature on the ope…

On June 1st, the S&P 500 finally broke through 4200, and a quick 10 trading sessions later, it closed above 4400. While many have been pointing to a narrow leadership for the gains, that has broadened recently as shown by the Advanced/ Declined lines, and the percentage of stocks above their 50/200d moving averages (for the SPX, 68% and 61% respectively). Even with the Fed’s hawkish skip yesterday that still has a couple more hikes planned (our economist Melissa Davies sees 6% in the Fed’s futu…

All those who were expecting a rate cut during 2023 can take a HIKE! After the Fed surprised no one by holding rates at their current levels, the median rate is now forecasted to be 5.6% at end of 2023 and 4.6% at end of 2024. Today’s can only be seen as a very hawkish “pause” and will give the Fed more time to assess the 15 months of rate hikes. The FOMC raised its forecast for 2023 core inflation. It is now expecting an upper bound PCE of 4.5% compared to the previous 4.1% helping to support…

Equities marched higher in today’s session after a lighter = better CPI print earlier this morning. Headline inflation fell to 4.0% in May vs 4.1% expected and 4.9% prior due in large part to declining energy prices. Core CPI (ex-food and energy) rose 0.4% which was inline with expectations and prior. And while it doesn’t seem enough to change the expectations for a hike tomorrow, we know that the core number is still too high. Consensus has centered around a pause for tomorrow’s rate decis…

“Every day begins with an act of courage and hope: getting out of bed.” – Mason Cooley

Zero US economic data today so let’s talk about the Canadians. They have been a hot topic this week in terms of interest rate hikes, employment data and nearly taking out the entire east coast of the US with smoke. After raising rates for the first time since January earlier this week(pre-cursor to next week’s Fed, probably not), Canada posted a loss of 17.3k jobs in May and a rise in the unemployment rate. The unexpected job loss sent US Treasury rates lower for a brief period before recoverin…

An idle mind is the devil’s playground and sadly things have been far too idle recently. And boy is the devil playing…yesterday’s surprise hike from the BoC lent credence to a similar move by the Fed (acc to some). This in turn helped further fuel a move into the value/cyclical set, culminating in the best 5-day performance for the R2K in 2 years. Today? We got jobless claims amidst a relatively dry economic board and the ‘hike’ in that data saw a slump in yields across the board, with tech res…

Smoke filled skies over the East Coast gave an eerie feel to the day (https://www.earthcam.com/usa/newyork/worldtradecenter/?cam=skyline_g), but that was not the reason for the investor rotation out of mega-tech. The NYFANG added 17% to its year-to-date performance in May and has single handedly supported the S&P 500 (and Nasdaq), giving traders a reason to take some money out of the group and add to some of the underperformers. The easy mark is the Russell 2000, and the index added another 1.7…

When Goldman reports panic buying (overall BUYS to SELLS at the 98th percentile), the CNN Fear and Greed Index reads “Extreme Greed”, investors are actively hedging “melt up” risk (Friday saw the largest notional SPX call volume ever) and tech is stretched to max extremes of overbought territory, is it time to SELL? Apparently, not. US stocks vacillated between gains and losses today, but ultimately finished the day in positive territory. The small cappers were the clear winners as the RTY was…

Choppy trading ending lower on a quiet Monday had indexes with mixed performance throughout the day. The bias was higher to start, as fueled by softer ISM data in support of the Fed’s “skip” narrative leading into the June meeting while keeping options open for thereafter. Despite having entered the quiet period, the Fed team will get a look at CPI/PPI next week before their meeting, and that will keep traders on edge into the 14th. The S&P rallied towards a new 52-week high into midday (4305…