S&P 500 yet again closed on a weak note, but the second red candle in a row with a daily range between 3,650 and 3,680, warrants short-term caution. It‘s all fine and dandy that bonds closed really risk-off, but the TLT and HYG boat are tilting a bit too much one way. Come Friday‘s key data point, the bearish sentiment is to get checked – and the slight decline in yesterday‘s volume in stocks and corporate junk bonds hints at the late Monday announced shallow reprieve to get more serious today. The dollar has already retreated somewhat intraday, and should the beaten GBP catch a bid to at least 1.08, risk assets as a whole would benefit.
So far, it‘s chiefly oil and gold that are benefiting. Oil, of course – its low is in, and we‘re to consolidate and easily reconquer the $80 handle – oil stocks are starting to turn up, and sure they do look more constructive than miners. Silver and copper still lagging reflect that the shallow reprieve (this pendulum swinging back towards risk-on) is not firing on all cylinders – it‘s just as much evident in the wild crypto swings of yesterday and today. Buy the dippers appear again emerging and recharged – that‘s the essence of the reprieve we‘re to see today (and probably also tomorrow unless Treasuries tank into the close today, which is unlikely) unfold. As regards the narrative, the peaking inflation would provide the fuel, and markets look more than willing to shake off any upcoming mediocre inflation number, and try to position themeselves for the next CPI reading. There are plenty of signs pointing to peaking inflation, rents and wage pressures, after all.
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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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