“Success is just staying in the game long enough to eventually get lucky."
— Ken Griffin
Enjoying The QuiCQ but not yet signed up for The Quotedian? What are you waiting for?!!
Another relatively quiet session, with major US indices closing in the green, though with inversed breadth numbers. I.e., if Wednesday saw small index gains on the back of weak breadth (more losers than winners), yesterday the market provided yet another small gain (S&P +0.4%) but on the back of much healthier breadth, with 375 stocks higher on the day and only 128 lower (3:1).
The chart for the S&P 500 continues to look extremely constructive:
And maybe most important to note from yesterday’s session is that the gains were not lead by the usual suspects (read: sectors) of recent past:
Rotation is the lifeblood of any bull market, as Ralph Acampora famously quipped …
The pressure valve on bond yields held yesterday, which is probably more excellent news than you realize:
The drop in yields came yesterday probably mostly on the back of a weaker PPI reading (-0.5% actual versus +0.2% expected) taking out soome some of the “stagflation” worries.
Nevertheless, mostly overseen investors and largely ignored by market participants, were prepared remarks by Fed Boss Powell, which seemed to poke a stick at the White House. As a reminder, earlier this year US Treasury Secretary Scott Bessent said that he and President Donald Trump were focusing on the 10-year Treasury bond yield as a key metric for economic health, rather than the Fed's short-term interest rate. Yesterday, Powell suggested that bond yields might stay elevated as a result of more frequent "supply shocks," like tariffs. "Higher real rates may also reflect the possibility that inflation could be more volatile going forward than in the inter-crisis period of the 2010s". And further: "We may be entering a period of more frequent, and potentially more persistent, supply shocks—a difficult challenge for the economy and for central banks."
Entertainment value: 10 out of 10!
In other news …
The US Dollar is continuing to weaken against major others
with the US Dollar Index (DXY) closing in on its short-term uptrend support line (dashed):
Gold continues with historically massive intraday swings:
Was the breakdown to 3,120 just a bear trap?
As we head into the last session of this week, Asian equity markets are trading a bit more red than green, though are clearly off their session lows. European and US index futures suggest a flat to friendly start to the cash trading sessions here.
Have a great weekend and as always - May the trend be with you!
Can the World (ex-US) really start outperforming the US (equity) market on a prolonged basis? For now, there has been rejection:
