The opinions expressed below are my own and do not necessarily represent those of Visdom Investment Group, LLC.
What a bounce... and fail.
Futures went substantially negative around 7 AM today and the S&P 500 opened down about 30 points and slipped further in the morning. Tariff talk and worries about global trade wars spooked the market. The S&P was off 90-100 points for the bulk of the morning. The index bounced at 11:30 AM and clawed its way higher until going positive around 3:20 PM! The index topped out + 16 and then fell down hard and fast. Trading was heavy with capital flow printing 150%. Yields went from down in the morning to climbing on the back end in the afternoon. Implied Fed Funds cuts for the year priced in 86 bips around 10 AM and 75 bips by the close, a large move for that market.
Headlines and soundbites buffeted the market in all kinds of ways today but the bounce appears to be mostly rooted in technicals and the approach of the S&P to the 200-day moving average (5726). The S&P came close at the intraday lows, 5732. The bounce that happened then gathered momentum and dip-buyers certainly felt vindicated with each uptick. News didn’t justify a freshly bullish approach to the market but who cares about news when momentum is working in your favor. The intraday momentum was strong enough to take the market into positive territory but when it was time to get out, boy did the players get out. We lost 86 points in about 30 minutes.
To say the market is jittery is an understatement.
The market is trying to figure out how this change in the investing landscape should be handled and whether aggressive dip-buying should be part of the process.
Old habits die hard and dip-buying has been the oldest, and most rewarding habit for the US stock market.
We’ll have to see what happens next but I think the bulls and dip-buyers should not think that 2025 is just like 2023 or 2024.
See you tomorrow.
-Mike
IMPORTANT INFORMATION
This is general educational information and market commentary and is intended for informational purposes only and is not intended as an offer or solicitation for the purchase or sale of any financial instrument or as an official confirmation of any transaction.
All market and economic data herein is as of the date hereof and sourced from Bloomberg unless otherwise stated. The information is subject to change without notice and we have no obligation to update you.
This general market commentary is intended for informational purposes only and is not intended as an offer or solicitation for the purchase or sale of any financial instrument or as an official confirmation of any transaction. The views and opinions expressed constitute the author(s) judgment based on current market conditions, are subject to change without notice, and may differ from those expressed by other employees of Visdom Investment Group LLC ("Visdom") and Visdom. Past performance and any forward-looking statements are not guarantees of future results. It is not possible to invest directly in an index.
We believe the information contained in this material to be reliable and have sought to take reasonable care in its preparation; however, we do not represent or warrant its accuracy, reliability or completeness, or accept any liability for any loss or damage (whether direct or indirect) arising out of the use of all or any part of this material. Any securities referenced are shown for illustrative purposes only, and are not intended as a recommendation or endorsement by Visdom or by the author(s) in this context. The information presented is not intended to be making value judgments on the preferred outcome of any government decision. This information does not constitute Visdom research, nor should it be considered a recommendation of a particular investment strategy or an offer or solicitation for the purchase or sale of any financial instrument. Investing involves market risk, including the possible loss of principal. You should speak to your financial advisor before making any investment decisions. Visdom and its affiliates do not provide legal, tax or account advice so you should seek professional guidance if you have questions.
