Morning Commentary
Humblebrag
noun: humblebrag
Yesterday, Jay Powell stepped up to the microphone to take questions about the state of the economy and potential next moves by the Federal Reserve’s Federal Open Market Committee (FOMC).
Call Him Mr. Immaculate
He had an extra pep in his step, and his first sentence was a humblebrag.
With all due respect to the late Franco Harris, whose immaculate reception put the Pittsburgh Steelers into the Super Bowl, if Powell does indeed pull this off, it's like everyone has won.
There is real economic damage, and most folks are in more dire conditions but not in an economic collapse. (More on this below.)
Economic Projections did not change much except for Fed funds projections. Now, the FOMC sees year-end 2025 at 4.6% from 5.1% in September.
Ironically, 2026 still finishes at 2.9%.
A March cut is back in play with a 63% chance of a 25-basis points (bps) cut, which was 40% on Tuesday and 11% a month ago. It should be noted a 12% chance of a 50-bps cut is being factored into consideration. There was only a 2% chance the day before, and a month ago, there was zero.
There is a lot of movement in the CME FedWatch Tool, but at one point yesterday, it was signaling six rate cuts in 2024.
Mission Accomplished?
I’m not an economist, but I read the work of many of them, and David Rosenberg of Rosenberg Research is among the best. Despite the positive groove and ‘mission accomplished’ vibe at the FOMC, he is cautioning that the Fed’s own projections point to a 90% chance of a recession.
The Market Goes Wild
I’m unsure if traditional safe haven sectors excelled yesterday as a sign of caution or opportunity, as they have had a miserable year. Along that same line of thinking, Energy (XLE) should have been higher unless an inflation proxy held it back.
Green on the Screen
Growth brought up the rear, but it was a green-letter day for the S&P 500.
Small cap value rules.
Today’s Session
Retail sales were up 0.3% versus consensus -0.1 and core +0.2% against consensus -0.1%
.
The ten-year bond yield is below 4.0%, and that’s the only thing you really need to know.
The big test at 3.90%.
Comments |
Yes, it is premature because the Fed's 2% target is still in the future. That said, with the 2% target as far off as 2026, the Fed has used what amounts to a complete business to do what, in the past, has been done much quicker. The result...rolling recessions as various industries take their turn and drawn out misery as real wages slowly catch up. One has to ask if that characterizes a soft landing, is the garden variety recession better? Ric Walter on 12/14/2023 10:08:33 AM |
GREEN is my favorite color ! Ric Walte, how many ways can you analyze a TURD ? Stop ! kemer nelson on 12/14/2023 11:59:34 AM |
It is called the MIRROR effect. kemer nelson on 12/14/2023 12:00:38 PM |
Tweet |
5/3/2024 1:41 PM | Cheering the News |
5/3/2024 7:33 AM | TIM COOKS THE (RECORD) BOOKS |
5/2/2024 1:54 PM | Holding Up |
5/2/2024 9:41 AM | COOL HAND POWELL |
5/1/2024 1:22 PM | Which Powell? |
5/1/2024 9:40 AM | MAY DAY, MAY DAY, MAY DAY |
4/30/2024 1:02 PM | Complete Flop |
4/30/2024 9:48 AM | CHIPS TAKE THE LEAD |
4/29/2024 1:39 PM | Musk Rides Back to the Mag Seven |
4/29/2024 9:50 AM | DIE BY THE SWORD, PROSPER BY THE SWORD |
4/26/2024 1:46 PM | Full Steam |
4/26/2024 9:39 AM | BIG TECH STEPS UP |
4/25/2024 1:16 PM | Don't' Bury me, Yet! |
4/25/2024 9:27 AM | THERE CAN ONLY BE ONE |
4/24/2024 1:30 PM | Earnings Flood In |
4/24/2024 9:26 AM | BUYING THE DIP |
4/23/2024 1:25 PM | Bloom Off Rose |
4/23/2024 9:32 AM | WHAT HAPPENED TO THE BRAVADO? |
4/22/2024 1:22 PM | Pins and Needles |
4/22/2024 9:30 AM | LIVE BY THE SWORD … |
4/19/2024 1:20 PM | Fair Chunk of Rotation |
4/19/2024 9:35 AM | DON’T OVERREACT |
4/18/2024 1:37 PM | Didn’t Break Down |
4/18/2024 9:40 AM | MARKET OFF SCRIPT |
4/17/2024 1:59 PM | Facing Pressure |
More commentary archives |
Home |
Products & Services |
Education |
In The Media |
Help |
About Us |
Disclaimer | Privacy Policy | Terms of Use | All Rights Reserved.
|