- Moving the market
Early trading saw equities take another dive as the latest inflation data wreaked havoc on the markets.
However, following this significant downturn, a remarkable intraday recovery pushed the major indexes firmly into the green. This turnaround was largely driven by Nvidia’s CEO, who reassured investors by stating, “the demand for chips is so great, everyone wants to be first.”
The latest headline Consumer Price Index (CPI) increased by 0.2% month-over-month, while the annual inflation rate fell from 2.9% to 2.5%, marking its lowest level since February 2021.
Although this was close to consensus estimates, the Core CPI, which excludes volatile food and energy prices, came in slightly worse than expected. According to ZH, this marked the 51st consecutive month of month-over-month increases in Core CPI, setting a record high.
This Core CPI figure is the one the Federal Reserve monitors most closely. Despite this, the odds of the Central Bank cutting rates by 0.25% remain at 85%.
Historically, September has been one of the worst months for equities, particularly for the S&P 500, which has averaged a loss of more than 1% over the past decade. With headwinds such as worsening inflation, reminiscent of the 1970s, traders are likely to feel uneasy during this uncertain month as we head into 2025.
Bond yields experienced significant fluctuations, while crude oil managed to bounce back above the $67 level. Amidst this confusion on Wall Street, the pressing question remains:
Will we experience a soft landing, a hard landing, or no landing at all?
2. Current “Buy” Cycles (effective 11/21/2023)
Our Trend Tracking Indexes (TTIs) have both crossed their trend lines with enough strength to trigger new “Buy” signals. That means, Tuesday, 11/21/2023, was the official date for these signals.
If you want to follow our strategy, you should first decide how much you want to invest based on your risk tolerance (percentage of allocation). Then, you should check my Thursday StatSheet and Saturday’s “ETFs on the Cutline” report for suitable ETFs to buy.
3. Trend Tracking Indexes (TTIs)
Wall Street experienced yet another tumultuous day, with bearish sentiment dominating the market. However, the atmosphere shifted dramatically when Nvidia’s CEO made optimistic remarks, which swiftly altered the market’s mood from bearish to bullish.
This sudden change in sentiment was powerful enough to reverse our TTIs, leading to a session that ultimately closed with little change.
This is how we closed 09/11/2024:
Domestic TTI: +5.48% above its M/A (prior close +5.43%)—Buy signal effective 11/21/2023.
International TTI: +4.50% above its M/A (prior close +4.45%)—Buy signal effective 11/21/2023.
All linked charts above are courtesy of Bloomberg via ZeroHedge.
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