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Will This Market Rally Continue?
Did we finally hear a ‘less hawkish’ Jay Powell yesterday? For the first time in months the Fed Chair may have slightly lowered his guard. But barely… as Powell is far from being a dove. A dovish Fed is one that is (a) cutting rates; and (b) ending quantitative tightening. Neither of those things are happening soon. But it wasn’t just Powell’s language which fired up the bulls. Janet Yellen also played a role – suggesting the government plans to sell less debt than expected… sending bond yields lower.
The Folly of Forecasting
July 24 this year the S&P 500 traded around 4600. At the time, gains were almost 20% for the year. The bulls had all the momentum and analysts were ratcheting up their end of year forecasts. Some felt 20% YTD gains were not enough – calling for even greater upside. What happened? Stocks corrected around 10% offering investors a better opportunity. The game of near-term forecasting is a fool’s errand…
4 Ways to Invest in Bonds
If you’ve been following my posts the past few weeks – I’ve suggested it’s a good time to start increasing your exposure to bonds. As part of these missives – I’ve also had many reader emails asking me how? This missive will offer you a guide on some of the simple ways you can increase your exposure to fixed income. But let me offer a caveat… bonds are not risk free (nothing is)
Bifurcated Markets Usually End the Same Way
If you’re long the market – it was another rough week. My portfolio was no exception. My largest position (Google) was smoked – losing around 10%. The Index is now only up 7.24% for the year…. a long way from almost 20% higher in June. The next hurdle for the market comes next week – when we get payrolls. A soft print might give the market hope the Fed is almost done. However, if it comes in hot, the Fed may have no other choice but to hike again in December… given the uncomfortably high Core PCE last week.