Financial News vs. Noise
So this was interesting yesterday:
Fed’s Goolsbee says he was ‘confused’ by last week’s market reaction-CNBC.com
“It’s not what you say, or what the chair says. It’s what did they hear, and what did they want to hear,” said Chicago Fed President Austan Goolsbee said on CNBC’s “Squawk Box.” “I was confused a bit — was the market just imputing, here’s what we want them to be saying?”…
So we have now had 3 Fed heads seemingly walking back Powell’s apparent dovish comments, but the market doesn’t care. As I have said previously, I think the powers that be want a rally into year end, we worry about this stuff next year. Be cognizant though, as more and more people call it a year strange things can happen in low volume environments.
Not to be left out, the FDIC also chimed in:
“The focus still needs to be on inflation,” Bair told CNBC’s “Fast Money” on Thursday. “There’s a long way to go on this fight. I do worry they’re [the Fed] blinking a bit and now trying to pivot and worry about recession, when I don’t see any of that risk in the data so far.”
Just when you thought you were getting a handle on where the Fed stands of course you also have this from Nickileaks:
Not to be left out:
Fed’s dovish pivot is big gamble that’s likely to fail, says former top New York Fed official-MarketWatch
`I hope it goes well. Unfortunately, there’s still a significant chance it won’t.’
— Bill Dudley, president of the Federal Reserve Bank of New York from 2009-2018
So are they dovish or hawkish? No clue, but by default when a central banks stops tightening the market perceives them as easing. Meanwhile, the last central bank meeting of the year, I think, happened in Japan, who kept their negative interest rate policy. Will see if that has any impact on us today.
Yesterday’s up move in the market was led by the Magnificent 7, perhaps rumors of their demise are a bit pre mature. Still believe you buy dips in those names. SPY took in an all time record of $20BN on Friday. SPY is like almost 50% Magnificent 7, so whatever you think of them and their valuations, the flows still favor them.
Elsewhere the oil companies and Chinese names continue to look like they want to come off bottoms. We are still cautiously optimistic there. We picked up ADBE yesterday when it bounced at it’s 50 day.
I also think you need to be adding commodities. We bought MOS today and are watching BTU.
I am also keeping an eye on TLT, this move looks like an AI stock so it could turn into an interesting short.
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News vs. Noise
I do start to worry when the bears capitulate. One of Wall Street’s biggest bears says the Fed is giving investors a good reason to be bullish in 2024-MarketWatch
Not when you are a dip buyer. There are rarely this many stocks ‘overbought’ — but usually it’s a good sign-MarketWatch
Matthew Tuttle is the Chief Executive Officer and Chief Investment Officer of Tuttle Capital Management, LLC.
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