The Woke Street Journal
Politics is a messy business. You are always going to try to make it sound like your opponent is worse than they are, but we need to be very careful if we compare someone to Hitler. Hitler tried to wipe out specific races of people, killed millions, and started a war that devastated his country. The generals who tried to take him out in 1944 are now thought of as heroes and patriots. If they had been successful they would have saved millions of lives. We have all heard the time travel question, if you could go back in time what would you do? Many people say they would go back in time and kill Hitler. If someone is the next Hitler then anyone who take them out should expect to be thought of similarly.
Market
Congratulations to everyone who survived the bear market of July 11th. Once again this market shows us the folly of trying to call a top. The real interesting thing for bulls is that pretty much everything was up. The S&P 500 percent of stocks above their 20 day is something I have brought your attention to a few times, it’s now near the highs of the year.
Something to keep an eye on when we get there again is that 25% level seems to be a decent counter trend indicator (except for April of course).
NVDA continues to hold support.
TSLA said FU to the bears and pulled an undercut and rally at it’s 10 day.
TSLA is up big this morning, probably on this. I am probably going to sell a good portion of my long into this news today. Shots Fired, Elon Musk Heard a Call: Donald Trump-WSJ. Not political in any way, shape or form. I think there is no reason TSLA should rally on this and a Trump Presidency, if anything, should be a negative for EVs.
Software came back.
Small caps went from nowhere to yearly highs.
Our trend following models picked up half positions in IWM and MDY (mid cap). Don’t quite trust this rotation, but want to be there if it’s real.
Dow went from nowhere to near yearly highs.
Helping to fuel the fire are rates which are expecting a September cut, and maybe more than one this year.
Dow Rises Above 40000 With Investors Putting Rate Cut in Sight-WSJ
The Federal Reserve is widely expected to hold rates steady at its meeting later this month, but traders on Friday were pricing in a 94% chance that the central bank will cut interest rates in September, according to CME Group data. That is up from 78% a week ago.
From Mike O’Rourke…
Bloomberg indicates the CPI and PPI readings likely result in a June Core PCE reading of 0.125%. That is a 1.5% annualized pace and it lowers the 3 month annualized pace to 1.89%. The 6 month annualized pace moves down to 3.19%, but once the lofty January reading falls off, it is closer to 2.5%. As the market quickly surmised, these numbers place Core PCE on a path to 2%. The notable difference between inflation cooling in 2024 versus the sharp cooling in 2023 is that GDP is not averaging 4%, it is just shy of 2% and the Unemployment Rate has crept 50 basis points higher. It will be easier for the FOMC to establish "greater confidence" that inflation will return to 2% when the economy is not running hotter than forecasted potential.
It’s Time for the Fed to End the Waiting Game-WSJ
Why wait until September?
That is the question hanging over markets after Thursday’s surprisingly weak inflation reading. There doesn’t seem to be much reason for the Federal Reserve to put off cutting rates any longer, and waiting too long carries risks of its own.
Bottom line is this, the consumer is stretched, there is a time bomb in regional banks, inflation is not going down, we may be heading into a recession.
Stock market’s long-awaited Great Rotation needs to overcome this nagging worry-MarketWatch
Stock-market investors got more than a whiff this week of what bulls hope to be the start of a long-awaited rotation away from an increasingly narrow band of megacap technology winners to left-behind parts of the market.
But a big question remains: Will the consumer play along?
Jefferies….
As long as Fed September rate cut expectations remain in the cards, we expect the narrative to support risky assets. A resilient economy with slowing inflation should indeed lead to the Russell 2000 outperforming. But with our view that the economy will slow down over the coming months, we do not see a sustained outperformance of Russell over NASDAQ
The market doesn’t care. One day it will, so I do think you should have longs and shorts, but I think you need to continue to buy dips, especially in tech, and especially in anything to do with AI.
What about the attempt on Trump’s life?
Haven Rush, ‘Trump Trades’ on Investor Minds After Shooting-Bloomberg
Investors will initially favor traditional haven assets and perhaps lean into trades most linked to former President Donald Trump’s chances of winning the White House after he survived an assassination attempt, according to market watchers.
Regardless of what you think about him, what happened isn’t right. Doubt it has an impact on the overall market, but if he jumps in the polls it could have an impact on DJT (which I am kicking myself for stopping trading). I could also have an impact on the law and order stocks, like GEO, which I do own.
Negatively it will probably impact solar and other clean energy.
I would ignore any noise that comes out about how Trump would do this or that to the economy or inflation. I would also ignore any noise about what Trump would do for the deficit, all Presidents suck on that.
DEI
Probably a good idea. Forbes DELETES article from DEI expert claiming Trump will be more appealing to black voters after surviving shooting-Daily Mail
Months before the Secret Service apparently missed a gunman on a rooftop and a female agent was seen on video struggling to put her gun in her holster after Donald Trump was shot, there were indications that the Biden administration’s focus on identity politics had undermined competence at the protective agency.
Better, but not enough. America’s HR Lobby Scraps the ‘E’ From DEI-WSJ
SHRM, a lobbying and advocacy group with 340,000 members, announced this week that it wants employers to focus on inclusion and diversity efforts—in that order. The group, a powerful lobby in Washington, said that it’s moving away from equity language to ensure no group of workers appears to get preferential treatment. Equity, in HR parlance, is the notion that companies should take steps to level the playing field for workers.
CNN Dismantles Race And Equality Team Amid National Mass DEI Disbandments-MSN
A CNN spokesperson speaking to Lewis denied that the Race and Equality team would be “disbanded” amid layoffs and instead would be “fully and completely” incorporated into CNN’s future vision. The spokesperson insisted that “the investment is still 100 percent there.” But the unnamed person did confirm that the team no longer existed as it initially began, adding, “For all intents and purposes, the team is not a team anymore. They’re assigned to different areas so that [their] perspective and work is brought into all of our types of programming. It’s not a unit in the way it was before, but [Race and Equality] is very much still their focus.”
Woke
Woke Science Has Already Cost You Millions-National Review
A National Science Foundation program mandates that scientists adopt politicized research methods, making wokeness — instead of truth — the goal.
Things That Get Blamed for Climate Change
The Contradictions of Biden Climate Policy in Profile-WSJ
The decisions limit economic opportunities for Alaskans, but East Coast denizens should care too. Denying the construction of the Ambler Road blocks access to a wealth of minerals needed for the Biden administration’s clean-energy agenda. The government’s right hand would be wise to consult what its left is doing.
Baltimore joined other progressive cities in suing fossil-fuel producers for causing a public nuisance with their emissions and misleading consumers about their contributions to climate change. The city demanded that the companies pay damages for sundry climate harms allegedly resulting from their emissions.
No dice. “Global pollution-based complaints were never intended by Congress to be handled by individual states,” Baltimore City Circuit Court Judge Videtta Brown, a Democratic appointee, explained in her ruling. “Federal law governs disputes involving air and water in their ambient state.”
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