S&P 500 didn‘t like even the 50bp hike idea for May, or the increased bets on 75bp one in June. No reason to be stunned, such moves were long in the making, but won‘t be enough to derail inflation beyond a temporary softer patch coinciding with real economy deceleration. Well, what deceleration – we can get even a negative quarterly GDP print on Thursday. Yields clearly haven‘t yet peaked, and the S&P 500 didn‘t yet slide enough. Value, defensives and non-cyclicals won‘t save the day – I continue being bearish foremost on tech. New Nasdaq downleg appears underway, and I hope you‘ve taken advantage since I started beating the bearish drum around a month ago.
Post Powell, real assets would regain footing earliest as I expect the stock market declines to turn into a solid bid for bonds at some point in the (not too immediate) future. That would work to take down the dollar a notch or two – just check its daily decline on Wednesday that coincided with a TLT upswing. The upcoming necessity to turn dovish (early autumn?) would be first sensed by precious metals – and as the Fed can‘t print commodities, copper, crude oil and natgas would continue doing fine, especially in the current confrontational climate. Next week‘s decisions from Europe won‘t alleviate that, unfortunately. Energy can keep consolidating before launching higher again, with little to no prior notice. The crypto fate perfectly highlights the issues – the rush into necessities of life goes on as agrifoods and fertilizer show, among much else. Let the sound trading decisions keep bearing fruits!
There won’t be a regular analysis featuring charts or Twitter activities today, but I’m keeping a close eye on the markets and will issue a sound commentary whenever required by the markets on my watch.
Thank you for your patience, and have a great weekend.
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All essays, research and information represent analyses and opinions of Monica Kingsley that are based on available and latest data. Despite careful research and best efforts, it may prove wrong and be subject to change with or without notice. Monica Kingsley does not guarantee the accuracy or thoroughness of the data or information reported. Her content serves educational purposes and should not be relied upon as advice or construed as providing recommendations of any kind. Futures, stocks and options are financial instruments not suitable for every investor. Please be advised that you invest at your own risk. Monica Kingsley is not a Registered Securities Advisor. By reading her writings, you agree that she will not be held responsible or liable for any decisions you make. Investing, trading and speculating in financial markets may involve high risk of loss. Monica Kingsley may have a short or long position in any securities, including those mentioned in her writings, and may make additional purchases and/or sales of those securities without notice.
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