Financial News vs. Noise
Friday was about as expected after a strong week for the market. This week we have a lot of Fed speakers and PCE. May not matter as much after FOMC, but have to think a major outlier could move the needle. In a note over the weekend Jeffries pointed out a subtle change to the Fed statement:
It seems to me that most of us missed the subtle language change from “returning inflation to our 2 percent goal” to an emphasis on “We're strongly committed to bringing inflation down to two percent OVER TIME”.
If it is a genuine change of tone – vs a not so unusual flippant flip-flop from Powell - then it can be argued that we essentially have a soft removal of 2% target per se - or an elongated timeline to get there…
If this is the case, then in my humble opinion, this implies…. that Powell and Fed are displaying signals that growth is more important than inflation now (as we have seen a significant fall in inflation – even if not at original target but close enough). If the aforementioned is the correct way to interpret the change of tone - then I believe this is a huge policy asymmetry – and poses as significant risk for bonds – unless there is simultaneous policy implementation encouraging institutions to buy the long end.
Meanwhile, this continues to look like an uptrend:
Rates also came down Friday:
You could nitpick about gold, but it’s had quite a move
I am still intently watching the “stuff” stocks. Fertilizers took it on the chin Friday. We added MOS to our trading watchlist a week or so ago, in addition to CF. I was already long MOS and went long CF Friday on weakness. It had a U&R at the 20 day EMA.
Continue to like how CCJ looks, would like to see some more volume though:
DWAC had a buy the rumor sell the news day, kind of feared that a bit but did buy some calls. I think this is going to trade like a meme stock, but I could be very wrong about that. Recent history of despac’s has not been great.
Watch AMD for potential dip buys/shorts. Lot of support at the 170 level and at this point my thinking is any dip is a buying opportunity on this China news.
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