A retreat in US markets today after returning from a long holiday weekend. To be honest, this downdraft feels like a welcomed moment of sanity- and perhaps the extra rest allowing further time/space for markets to digest and react to the current landscape we are navigating. As the shorter-term trend is now pointing, we took another break from fighting the Fed and surrendered to a higher-for-longer reality as markets fell lower. PMIs hitting the tape this morning and showing a robust global e…

This week has provided investors with some things to think about. The trajectory was never going to be diagonally higher after the 2022 performance, but rather a bumpy one that hopefully will end higher. That turbulence will also happen in economic data, as markets learned via the CPI, PPI, and Retail Sales. But even though all three surprised, equities still moved higher for the week (Nasdaq and Russell 2k), or only lost small (S&P 500). The strength here, is shrugging off the weakness in Trea…

It’s not easy getting answers these days. Take the US for example. We’ve basically become a skeet-shooting enthusiast with the way it’s taking UFOs out of the sky lately. And yet, according to POTUS, we’re still unable to say what they are exactly. Not the most comforting of updates! Markets have been similarly beguiling, with equities universally going better on the back of a China reopening that’s yet to fully materialize and a rate hike cycle that seems to have the goal posts pushed out as e…

The consumer is consuming! In another blow to the Fed’s attempt to cool inflation, the US consumer remains strong in the face of rising interest rates and persistent inflation. After seeing a welcome decline in retail sales for the months of November and December, the consumer rebounded strongly in January as retail sales jumped 3%, cruising past the estimated 2%. Treasury rates reacted as expected, climbing higher and approaching levels last seen at the end 2022. We are looking at the US5Y (4…

Today was highly anticipated by both lovers and investors. We don’t feel qualified to comment on the former (or the latter for that matter!), but the markets also didn’t seem to know how to respond to this morning’s CPI headlines. The truth is, there wasn’t a lot of new information contained within today’s report. Prescription drugs saw increases, while used car prices saw more decreases than expected (though a reminder that the most recent Manheim saw car prices rising). Shelter and Energy mad…

Monday proved to be another setup day with muted activity and volumes, not not SuperBowl related, but with a fresh, and clutch, CPI print on the horizon for tomorrow, little incentive to add additional risk. The path of least resistance led us higher on the margin today, but think it is fair to call it rangebound trading currently. Our charts team citing this the fancy way: S&P has had seven 1% swings in the last 5 days, including two 2% swings, but we’re back to where we were 5 days ago and e…

A week of wobbles, but nothing much has really changed in terms of the bigger picture (yet). The Dollar remains in a downtrend (though DXY was slightly stronger +35bps today) and the SPX, though below 4100, did not reach its February lows of 4048.50. The RTY remains above its significant 1900 level as well. However, we have seen a divergence of real yields higher and Nasdaq outperforming the S+P ((rather than the Nasdaq underperforming when real yields are higher) – a sign of vulnerability. Its…

You know what ‘they’ say… “Don’t fight the Fed!”… But the market really has been more of a fighter than a lover lately in this regard. For today, however, the fighters ultimately conceded as fatigue set in- even despite a strong setup out of the gates- sending the S&P lower on the day to close below 4100. Markets traded in a traditional upper left to lower right formation, ending the day near session lows albeit on more muted volumes. Perhaps simply a healthy pullback as we try to grapple wi…

Back in July 2001 my family and I were heading to the local theatre for movie night. We were going to see the new Steven Spielberg movie and as fan of many of his previous directorial releases, most notably Jaws, everyone was excited. The movie was A.I. Artificial Intelligence, and it remains today, in my opinion, one of the worst movies ever made. Was Google’s release of its AI search assistant Bard as bad? No, but Mr. Spielberg’s movie did not wipe $100bn worth of market cap away. Bard’s inc…

After last week’s hyper economic data releases, investors have had to suffice with a quiet week so far. While Fed heads have been released from their pre-FOMC quiet period, there has not been a rush by them to speak their minds. That quiet changed today for a brief period as the markets heard from both Kashkari and Powell, the latter having the most impact. Traders are battling the Fed about peak rates and when potential cuts may come, and after the Nonfarm payrolls Friday, the Fed seems to be…