Equity markets tried to rebound on Thursday, but the move was weak and short-lived. The S&P 500 gained about a half percent at the session's high but closed the day with a loss of 0.35%. The move may turn into a deeper rout today following the NFP report. If it aligns with labor data released this week, it will reaffirm the idea that the FOMC will keep interest rates higher for longer. In this scenario, the FOMC is on track to cut rates in 2023, but when and why are yet to be seen. As it is, the first cuts aren't likely until later in the year. Next week starts peak earnings season, but d ..read more

Equity markets fell for the 2nd trading day in January, marking the start of what could become a significant contraction for the S&P 500. The index shows signs of topping below critical resistance with a growing consensus that January will be a hard month for mega-cap stocks. Names from Apple to Amazon are moving lower as investors shed holdings in overcrowded names to raise capital. The thought is that a rut in the first half will quickly lead to a market bottom and the next great entry point for index investors. Among the signs of impending doom are the VIX and non-cyclical safe-haven s ..read more

It's the first trading week of the New Year, and all eyes will be on the data. The monthly labor market data is due over the week and may lead the market to a new high. Solid employment and wage gains will help clear the path to a soft landing, allowing the FOMC to start cutting rates early in the year. As it is, the market expects the first cuts by March. Earnings season begins next week with reports from the big banks. The banks will likely report robust gains driven by high interest rates; the question is what condition the consumer is in. Consumer spending is the driving force of the US e ..read more

Equities advanced on Thursday, extending the week's Santa Claus Rally to about 0.75%. The rally may continue on Friday, but it looks unlikely we'll see a new all-time high on the S&P 500 until next year. As robust as the outlook is for 2024, there are concerns that earnings growth will not be as good as forecasted and that the FOMC may tip the economy into recession. Because it takes 12 months or longer for FOMC policy changes to take full effect, the impact of rate hikes in the first half of 2023 are still working their way through the system and could cause a marked contraction in activi ..read more

Equities advanced on Thursday, extending the week's Santa Claus Rally to about 0.75%. The rally may continue on Friday, but it looks unlikely we'll see a new all-time high on the S&P 500 until next year. As robust as the outlook is for 2024, there are concerns that earnings growth will not be as good as forecasted and that the FOMC may tip the economy into recession. Because it takes 12 months or longer for FOMC policy changes to take full effect, the impact of rate hikes in the first half of 2023 are still working their way through the system and could cause a marked contraction in activi ..read more

Equity markets hovered near break even on Wednesday as investors weighed the possibilities for 2024. Among them is a rally. The outlook for earnings is growth with sequential acceleration throughout the year. Another is a recession. The FOMC policy is restrictive and yet to be fully seen in the data. The odds are high that consumer spending will be weak in the first half and may lead to a recession. This sets the market up to advance, provided the Q1 reporting season is good, or to fall if it isn't. The next market-moving news for equities will come next week. The monthly jobs creation data i ..read more

Equity markets advanced on Tuesday in a day of light holiday week trading. The S&P 500 gained less than a percentage point but set a new two-year high and is on the way to retesting the all-time high soon. Equities will likely move higher this week in a Santa Claus Rally and could set a new all-time high before the New Year. This week's action will be characterized by low volume. Traders and investors are taking a break, waiting to see what happens with the New Year, inflation and the Fed. There are no earnings reports and few economic releases, so politics and geopolitical tensions could ..read more

Equity markets closed out the week with a gain, making the 8th consecutive weekly increase for the S&P 500. The hope for FOMC rate cuts early in 2024 has driven the move, and this week's PCE price index aligned with the outlook. The index came in at 3.1%, slightly cooler than expected, suggesting the Fed's soft landing is fast approaching. The question is if the economy will hit the ground running or crash through, and either scenario is unfavorable to equities. On the one hand, disinflation and deflation will lead to recession and on the other, consumer inflation remains hot for years wi ..read more

Equity markets tried to rebound from Wednesday's unexpected selloff on Thursday but failed to regain the prior days' losses. The S&P gained 1% for the day but closed well off the highs for the week. The weekly pattern suggests a rising level of fear ahead of the PCE report, due out Friday. The PCE report is expected to confirm slowing inflation but at an insufficient pace to allow the FOMC to cut interest rates soon. The S&P 500 price action shows resistance below the all-time high, a critical hurdle for the market. Given the proper catalyst, resistance at this level could lead to ran ..read more

Equity markets tried to rebound from Wednesday's unexpected selloff on Thursday but failed to regain the prior days' losses. The S&P gained 1% for the day but closed well off the highs for the week. The weekly pattern suggests a rising level of fear ahead of the PCE report, due out Friday. The PCE report is expected to confirm slowing inflation but at an insufficient pace to allow the FOMC to cut interest rates soon. The S&P 500 price action shows resistance below the all-time high, a critical hurdle for the market. Given the proper catalyst, resistance at this level could lead to ran ..read more