S&P 500 was stopped in the 4,180s, and core PCE only a little hotter didn‘t help stock buyers even if yields retreated from intraday highs – they did retreat first thanks to no reassessment of inflation stickiness (it is sticky, and will keep accelerating this year still), and then the Israel move lighting fire under safe haven trades. Yes, I called the gold upswing to happen during Friday on Telegram, and there was another great day in our intraday Telegram channel bringing gainful calls to clients.
But where are we standing in the stock market and real economy prospects? Bond yields haven‘t yet peaked, and their increase is as much a function of still very resilient and (in rear view mirror only) accelerating real economy, and overwhelming supply of new and rolled over Treasuries hitting the market. Clearly, this dynamic has more time to play out as recession arrival isn‘t imminent – and no landing narrative is supportive to high yields and higher for longer theme where the Fed can somehow mop us the excesses without crashing the economy.
By the same token, yield curve steepening is to continue, and serve as a countdown to recession. Remember the key summer event in central banking – BoJ expanding the permissible yield curve control band – and consider that it had to do unplanned interventions more than once a week in October, and that the yen is still weakening.
Also Q3 earnings are proving not to be disastrous (I didn‘t expect them to be), which bodes well for a rally developing later this quarter – consumer is still strong (strongly spending even if with the help of credit cards as revolving credit is $1.3T now) and manufacturing solidly improving, hinting at better days in stocks – which I would tell clients about as soon as that becomes imminent.
Individual charts analytics have more details – and I hope you‘ve reviewed the extensive Sat video as well.
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Let‘s move right into the charts (all courtesy of www.stockcharts.com) – today‘s full scale article contains 6 of them.
Sectors and Stocks
TSLA hasn‘t yet cleared the danger zone, and looks set to visit $180s as I wrote almost a week ago. Fine bearish progress made.
BAC, JPM or WFC, the story is the same – vulnerability and underperformance as talked already.
Gold, Silver and Miners
Even if miners with gold turned up, keeping above $2,020 would prove a short-term feat – gold is likely to move now back and forth within the high ground established, unless escalatory headlines jolt it higher later on.
$3.55 copper did indeed hold, and next bullish objective as per Friday‘s call, remains $3.68 . The red metal is starting to show very short-term resilience, and that‘s as well thanks to consumer one year ahead inflation expectations having gone up.
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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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