The opinions expressed below are my own and do not necessarily represent those of Visdom Investment Group, LLC.
New highs, little news
Futures climbed small in the premarket and headlines were bland. The S&P opened about +20, added 10-15 more points into lunch and gave that back in the afternoon. Elon Musk’s announcement of his personal purchase of about $1 billion of TSLA stock sent the price up multiple percent. Other Mag 7 stocks did well too as mega cap pushed the S&P yet again. Yields dropped small along the curve and capital flow was a touch higher at 109%.
Without bombshell news, we’re essentially waiting for the FOMC on Wednesday. Markets are almost unanimous in expecting a 25 bip cut. The market is wondering about the press conference and whether the Chairman will suggest that we’re at the start of an easing cycle, not just a cut or two.
Equity bulls are front-running the FOMC, not so much because they know anything but because front-running the FOMC as a bull has been very profitable for the past few years. Powell is likely to say the right things so I think bulls are keeping it simple. Buy ahead of the Fed.
Everyone knows not to fight the Fed. With the Fed clearly about to begin doing dovish things, why wait for the official start? Why not get a head start?
See you tomorrow.
-Mike
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