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My Hypothesis into Year End
I have four key hypothesis into how I am positioned for year end: (i) 2023 will bring a recession; (ii) earnings will contract; (iii) multiples will compress; and (iv) it’s premature to think about fighting the Fed. Let’s explore…
Classic Bear Market Rip
Stocks are likely to push higher through to the end of the year. It’s what we usually find after mid-term elections. But for now, this feels like another bear market rally… which will likely find resistance around the zone of 4100 on the S&P 500. We are a long way from any Fed “pause or pivot”…
“Rip Your Face Off Rally“… But What’s Changed?
It’s what you might call a “rip your face off rally”. Short traders are caught on the wrong side and scramble to cover… that’s what happened today as CPI came in slightly lower than expected. But is it reason to be jubilant? Hardly.
Inflation: How Hot is ‘Too Hot’?
CPI for October is likely to come in hot… expect a high 7-handle. But how much is too hot? Anything north of 8% cements another 75 bps; however something closer to 7.7% may give some hope the Fed can tap the brakes.