Bad Is Not the New Good
S&P 500 continued succumbing to rising yields, breaking with ease the 4,492 support, and then rebounding off the mid 4,460s – the Nasdaq bounce taking much else alongside, was a bit too steep, and not reflecting the earnings prospects to put it mildly (which is of course an intraday remark into a larger medium-term reckoning).
Likewise the fact that still solid consumer spending is the result of both almost fully depleted excess savings and the current savings rate dip to merely 3.5%. Add in stubborn inflation expectations, the gap between core and headline inflation to be resolved by again rising headline CPI, and still relatively solid job market, all of which goes to highlight more tightening needs, and rising rates reflect that. 10y yield has still a way to go (in time) before declining – and if not earlier, then the Sep FOMC with no hike, would do the job of bringing yields down.
Besides, housing is getting concerning, and JOLTS sign of the times (let‘s remember not only dismal current but also) last month‘s data had been revised down by 417,000 and that‘s the largest revision ever.
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Let‘s move right into the charts (all courtesy of www.stockcharts.com) – today‘s full scale article contains 3 of them.
S&P 500 and Nasdaq Outlook
4,462 wouldn‘t be beaten today – the back and forth grind lower, goes on Today‘s session would go mostly in one direction, and I would look at 4,432 target with comfort. In the Intraday Signals channel and on Twitter, I‘ll cover more sectoral perspectives as we go – bears have the reins clearly today.
Gold, Silver and Miners
Time for an early bid to emerge – relatively from nowhere. The stock market woes may help with some safe haven buying of gold, and keep long end of the curve in check. Watching for a bottom forming – if true, that would be very bullish that it happens in low $1,940s already. Silver is though to be still lagging for now behind gold.
Crude oil is to consolidate next, and sellers haven‘t yet arrived, but would probably achieve sideways to a little down move in prices at best. Supply driven resilience to monetary policy.
Copper already visited my Sat worst case target of $3.77, and doesn‘t look settled yet. Together with silver, would lag behind gold in this QT focus environment.
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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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