Financial News vs. Noise
Market came back a bit yesterday. Perhaps it was relief that Powell wasn’t hawkish, AMZN earnings, or just that it had been down 2 days in a row. This morning we are green again, probably due to AAPL, but remember jobs are 8:30.
Rates came down a bit, but are still elevated. If you look at a chart of the 10 year we are pretty close to where we were in the beginning of November when the recent rally started.
However, if you look at a chart of the S&P we are more than 800 points higher.
Not saying the market has to drop 800 points. With the market below the 50 day and 6 cuts off the table I am saying to be more cautious.
Watch 4.7% on the 10 yr. So far it doesn’t want to go there but the could change. Higher rates mess up people trying to buy homes, people underwater on credit card debt, and the US, which is underwater on debt as well. Powell says he’s not political, we will see. The Treasurys Market Is Getting Squeezed From All Sides Inflation and deficits are lifting yields and jarring the stock market-WSJ
Stickier-than-expected inflation this year has boosted yields on U.S. debt enough to dent the stock-market rally. Soaring spending by Washington shows few signs of slowing. And the latest plan to finance it all promises a flood of Treasurys in the coming months that will need to find buyers.
Also continue to keep an eye on the semi’s. NVDA earnings are still a ways away, 5/22. Think they are going to be extremely important. Remember, it was NVDA earnings in May of last year that started the recovery from 2022. Was talking to a Barron’s reporter yesterday on semi’s and he really likes AMD. I have been taking a beating on AMD calls, but it could get interesting if it holds, or undercuts and rallies, at the 200 day.
Chinese stocks had a massive rally yesterday. Remember coming into the year all the news (noise) about China was negative.
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Matthew Tuttle is the Chief Executive Officer and Chief Investment Officer of Tuttle Capital Management, LLC.
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