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- Moving the markets
The markets were in limbo this morning after Fed head Powell’s comments that progress on inflation has been made, but that he’s not ready to cut rates yet. That caused the indexes to vacillate with traders being unsure what to make of those remarks.
He then added that “we want to be more confident that inflation is moving sustainably down toward 2%, before we start the process of loosening policy.” Bond yields eased a bit, and stocks were pulled in different directions.
Eventually, the major indexes found a base from which to start a rally, as traders decided to interpret Powell’s cautionary words as good news for the markets—and up we went without looking back.
Giving an assist was an announcement that government job openings suddenly surged, while regular jobs were a tad better than expected, which helped send rate-cut expectations higher.
Tesla stock had great day by being up almost 10% on beating delivery expectations. I find that puzzling after reports pointing out that almost half of all EV owners would switch back to gasoline powered vehicles.
The Mag7 stocks rocketed higher based on Tesla news, also helped by sinking bond yields, which pulled the dollar off its lofty level.
Gold wandered sideways, and crude oil touched a new 2-month high before losing momentum into the close. Bitcoin’s attempt to recover its $64k level failed, and the coin closed just below $62k.
As ZH pointed out, macroeconomic surprises happen almost daily, but now they have spread around the world and broken into negative territory.
Does that mean the ball is now in the Fed’s court?
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