If the stock market was a fine dining kitchen, it would currently be midday and we would all be busy at the chop block with a knife in hand and tubs of vegetables to prep. Stock prices are waiting for a signal and just biding their time. Up, down. Up, down.
Just like it used to say on the back of the shampoo bottle: wash, rinse, repeat. The shampoo algorithm. That is what the current market feels like.
If you feel like you are in an episode of the “Twilight Zone,” you are not alone. For those Americans who do not live for every tick of the stock and bond markets, life is good.
Time for that official last ride, wave, hike, and drink of summer. While the loss of extra down time is a bit of a letdown, leaving these 90-degree temperatures is something to look forward to. With the right bookend to summer hitting this weekend, expect this to be a very slow week of news and work in the financial markets (apologies to those who must work Friday's jobs numbers).
With the financial markets still thinking of a high inflation, recession-destined economic picture, last week's much weaker inflation data dealt investors their own 'big slick' to consider.
Just when you thought all 'meme' stocks were headed to the pennies. Surprise! The July rebound from an oversold June shifted into a higher gear last week when the reddit/meme/unprofitable tech stock crowd came in from the beach with fists full of BUY tickets.
As bad as June's financial markets were for investors, July was the opposite. With worries over inflation, Fed policy, corporate earnings and a recessionary slide dialed up to the maximum, all it took was a bit of improvement from the worst expectations to move the markets higher.
Peak earnings. Peak prices. Peak interest rates. Peak summer temperatures. Peak Elon? The market continues to digest the paddle balls of earnings releases flying over the net.
No rose-colored glasses this week for either the triple digit heat or the double-digit Fed Funds rate hike. I just can't see the FOMC raising by 100 basis points and then running off for vacation for two months.
Major recession or mild slowdown? If we only knew the answer, the path would be so much easier. As Jon Hilsenrath notes below, if this is a recession, it will be one of the most unique that the U.S. has ever encountered. Friday's jobs data continued to suggest a healthy economy, not a deteriorating one.
Well after losing ground in 10 of its 11 last weeks, the S&P 500 showed some life with a strong positive move last week.
A ship in port will not catch fish, but it also won't sink during stormy seas. You have probably noticed that the recent market movements have been among the most violent ever recorded. The last two weeks have seen some epic swells that even broadsided the leading groups, like the Energy sector. This is what bear markets do. They roll through and hit everything.
May's CPI was a big surprise. This is not a market that wants surprises. The trust in the Fed and Captain Powell to land Air America took a big hit on Friday. Dreams of a September pause in rate hikes have now been replaced by five 50 basis point rate increases for each meeting left in 2022.
After firing up the financial markets two weeks ago at the J.P. Morgan analyst meeting, our favorite tennis playing NYC weatherman Jamie "Stormy" Dimon talked about hurricanes at the Bernstein conference. The markets were less than amused and caught playing deep off the baseline given the breakout in energy prices and the increasing hawkish comments out of FOMC members.
This month millions of kids will graduate from college and high school. For all of them, it was a diploma well-earned due to the pandemic interruption for more than half of their education.