Inflation: How Hot is ‘Too Hot’?CPI for October is likely to come in hot... expect a high 7-handle. But how much is too hot? Anything north of 8% cements another 75 bps; however something closer to 7.7% may give some hope the Fed can tap the brakes.
Fed AftermathApple, Amazon, Microsoft and Google have all been crushed post earnings. Apple is the 'best' performer - down approx 13% the past two weeks. What's next for large cap tech? I see more downside... and this post explains why.
Powell: ‘A Long Way to Go’No pause. No pivot. It's enough to make "doves cry". However, Fed said there will be a time when they will slow down rate hikes. But we're not there yet... expect rates to be higher than previously expected.
More Tricks than Treats?The market is up around 11% from its recent lows. Its rallying on the hope of a dovish Fed. My advice is tread carefully... you might get 'tricked' rather than 'treated' this Halloween. The upside does not handily outweigh the downside risks. Bear markets are known to do just that...
Does the Bullish Case Hold Water?Markets tried hard to rally this week - but was met with strong selling. I lay out both the bullish and bearish case... where I favor lower prices with a S&P 500 target of 3200
Tread Carefully…The two biggest headwinds facing stocks are higher rates (bond yields) and the US dollar index. Both are yet to peak or show signs of a downward trend. And until they do - we can't call a bottom in equities.
Things Starting to Look a Little BetterMarkets are slowly but surely starting to look better. Yes - they are 25% off their highs - but that's a healthy development. The way we make money is buying well. And with a little patience - we hope they go lower. My S&P500 target remains around 3200...
The Only Way is UpIs 75 the new 25? Fed funds futures are now pricing in a nominal rate of 4.5% to 4.75% for February 2023, with the first interest rate cut coming in November 2023. Markets are now slowly coming to accept this new reality...
Fed Faces a Long Fight with Sticky InflationCPI and Core PCE continued to rise over August. Core PCE - the Fed's preferred measure - was more than double expectations and 3x the Fed's target rate. Rates are to remain higher for longer.
The Case for Retesting the June LowsIt would be remiss of investors to rule out a retest of the June lows. This post explains my reasons not just technically (which has served us well) -- but more so fundamentally. Have we fully priced in the impact of where rates are likely to head in addition to QT?
