Market Caution Amid Middle East Tensions: Why Earnings Season May Hold the Key to Stability
The escalation of geopolitical tensions in the Middle East has the market in a bit of a holding pattern. The initial reaction saw a spike in Gold and Oil, but luckily, we haven’t had much followthrough to the downside since then. We will take a look at some charts and why I think the market is largely ignoring the news and still prepping for an upcoming earnings season and when I think volatility will subside.
Can the S&P 500 Break Its September Slump? A Look at the Bullish Rally and What’s Next for the Market
After the Fed announced the first rate cut, the market has been rallying to new all-time highs. And why wouldn’t it? The GDP report was in line with expectations, unemployment claims came under expectations, and Fed Chairman, Jerome Powell, said he is dedicated to keeping the US Treasury market – the deepest and most liquid in the world – functioning at a high level.
The bullishness has pushed the S&P 500 to be on pace to do something it hasn’t done in the last four years. It might close September in the green, but how long can this rally last?
Is Your Portfolio Ready if the Holiday Shipping Crisis Hits?
Christmas is canceled this year so start setting expectations early. Santa and his elves are likely going on strike in the coming weeks right in time for the election and for a busy holiday season. I haven’t lost my mind – I know Santa doesn’t exist, but the looming shipping crisis is around the corner and could have a major impact on some key industries within the broader market. Is your portfolio prepared?
All Eyes On The Fed As Small Caps Could Be Signaling The Next Move Ahead
The market is stuck in a holding pattern until the Fed announces its decision on an immediate rate cut and the plan for future cuts. Investors have been arguing over a 25 or 50-basis point cut and will finally get the answer around 2 pm EST. The broader market indexes traded above resistance levels intraday yesterday but retreated by the close. While waiting for the next catalyst likely to move the market, we will look at small caps to see how willing investors are to dip into the riskier investment pool. Are the small caps signaling the next market move?
Economic Reports Confirm Smaller Rate Cuts Ahead
The inflation story in the U.S. continues to improve, but August’s Consumer Price Index report indicates that prices are slow to drop across the economy. The slowdown of inflation will prevent the possibility of a big Fed rate cut in the weeks ahead. The market is reacting positively since the uncertainty of the size of the rate cut is now becoming clear. But how long will the optimism last and what sectors are likely to continue pushing higher from here?
The Fed’s Soft Landing Faces Turbulence
Treasury Secretary Janet Yellen says the U.S. is still on the path to a soft landing, but investors aren’t acting that way, selling off shares to make last week one of the worst weeks in a year. So what is it that she sees that investors don’t? How will the recent string of data affect the Fed’s decision to cut interest rates later this month? The previous two monthly jobs reports may show turbulence on the way to a soft landing.
Can The Pivotal Jobs Report Save The September Blues?
It seems like for months we’ve been focused on reports like the Consumer Price Index, Producer Price Index, and Gross Domestic Product growth. Everything had to line up perfectly to give us the soft landing, and for weeks, we were hoping to see a slowdown in growth just enough to give the Fed reason to cut interest rates. Now investors are getting that slowdown they asked for, but the stock market is falling instead. What can stop the fall and where can the market head from here?
Nvidia Day Is Over – Now What?
With Nvidia representing 7% of the S&P 500, it’s no wonder why investors were held hostage to Nvidia’s earnings report, but now that is beyond us, what can we expect next? Before we get too far, Nvidia’s earnings remind me of years ago when I was trading Apple regularly and the stock got punished for making billions, but not enough billions in profit. Or they sold millions of phones, but not millions + 1. Nvidia’s earnings still show this market has room to go higher, but we’re still on fragile ground.
Mission Accomplished
Despite investors’ hesitation toward the Jackson Hole Symposium, the event finished with the much-anticipated message from the Fed that it is now time for interest rates to come down. The market has already been pricing in rate cuts, so the next thing to watch for is how quickly rate cuts will be implemented. The market is pricing in a 0.25 basis point cut in September. How will this news impact trading for the week ahead?
The Fed’s Jackson Hole Gathering Brings Volatility
The Jackson Hole Symposium, a key gathering of central bankers and economists in Jackson Hole, Wyoming, runs from August 22-24. Powell is slated to deliver his remarks today at 10 a.m. Eastern time. The major indices fell over -0.05% yesterday, showing just how jittery investors are, waiting for a signal of upcoming Fed moves. You may remember 2022 when Powell spoke at Jackson Hole (a -5.5% move), but what does history have to say about the S&P 500 performance during this event?
