QuiCQ 17/09/2024
“An ounce of action is worth a ton of theory.”
— Ralph Waldo Emerson
Prefer to read today’s QuiCQ in PDF? No prob, download it here, but don’t you dare complain about the formatting!
The S&P 500 nudged 0.1% closer to a new all-time closing high, now only 34 points or 0.6% to go. But cheating a little bit by noticing the new all-time highs already reached by the Dow Jones Industrial index and the cumulative advance-decline ratio of the S&P itself (as discussed in yesterday’s Quotedian - click here), we would note that it is probably rather a question of “when” and not “if”.
Of course, we are all biting our nails to see whether the FOMC will cut by 25 or 50 bp and how that will affect the market (spoiler alert: it will not) and then thereafter what Fed Chair Powell’s press conference sounds like and how that affects markets (this could).
But back to yesterday’s session, where 9 out of 11 sectors closed higher, the laggards being technology and communications. This then would also explain the 0.5% drop in the Nasdaq on Monday. Nevertheless, the winning/losing stock ratio for the S&P was well over 3:1 and nearly a fifth of index members hit a new 52-week high. Not bearish.
Global yields softened further in yesterday’s session, with the US 10-year yield trading just a tad above 3.60%, whilst the US Dollar also weakened against most other major currencies.
Crude oil (WTI) recovered above $70 the barrel and now trades a healthy six percent off its closing low from a week ago. Gold closed at a new all-time high, but maybe more interestingly silver regained the USD30 level.
The following chart from Deutsche Bank’s Jim Reid shows the gap between the level of hike/cut the market had expected two days before the respective FOMC meetings and its effective outcome. Since the GFC the Fed has tried to avoid any major surprises regarding their upcoming monetary policy decision, but the one of tomorrow has got investors/traders the most confused in the past 15 years.
O forward guidance, wh're art thee?
