August Wasn’t Kind… Don’t Expect Sept to be BetterAugust wasn't kind for stocks - with the S&P 500 losing 4.2%. The market is now just 8.8% off the June 3636 low... expect this to be retested
Powell Delivers a Blunt MessageIf it wasn't already clear - it is now. Interest rates are going sharply higher and for longer. Powell's 8-minute Jackson Hole speech was carefully scripted - using words like "pain" to prepare the market for what lies ahead.
Don’t Fight the FedMarty Zweig's 1970 book "Winning on Wall Street" popularized the term "don't fight the fed". Today we have an environment where: (a) liquidity is contracting; and (b) rates are tightening. That's not conducive for higher prices.
The Pendulum SwingsWhen things are going well and prices are high, investors rush to buy, forgetting all prudence. Then, when there’s chaos all around and assets are on the bargain counter, they lose all willingness to bear risk and rush to sell. And it will ever be so - Howard Marks
The Bull vs Bear Battle Lines are DrawnThe bulls have market momentum supported by solid breadth. We are past peak inflation (it would seem) which lends itself to a more dovish Fed (in theory). However, valuations are high - trading 18.5x forward. What's more, the Fed is withdrawing liquidity - not adding to it. That's an argument for the bears.
The “Everything Rally” as CPI Comes in at 8.5% YoYThe market has now rallied to a zone of potential resistance (4200 to 4400). The next few weeks will be a strong litmus test for market. My guess is we roll over...
Stay Patient – Pullback ComingWhen prices are rising (as they are today) in a bear market -- all too often sentiment will shift prematurely. It's called a bear-market trap. And I think this is what we are seeing...
Risk On? Or Classic Bear Trap?The S&P 500 is up 14% from its June lows. But from mine, this is still a bear market rally. The Fed is far from done.
Big Tech Q2 Earnings: Mixed Bag (So Far)The market exhaled post Q2 earnings from MSFT and GOOG. In short, demand is not falling off a cliff. To be clear, earnings were not great... but they still both posted double-digit top line growth in a tough environment.
Walmart Cuts Earnings b/w 11% – 13%Add Walmart to the growing list of names slashing guidance. But this one is notable... especially given their read-through on the average consumer. What did we learn from the US' largest physical retailer.
