- Moving the markets
The S&P 500 ended higher on Monday, after a choppy session, as investors waited for the final Federal Reserve meeting of 2023. The big question is: when will the Fed start to lower interest rates?
The Fed is likely to keep the fed funds rate unchanged in the 5.25%-5.5% range. But Chair Jerome Powell may also signal his readiness to fight inflation in his press conference on Wednesday.
Many traders are betting that the Fed will cut rates by 0.25 percentage points in March. But don’t count on it. Higher-than-expected inflation data could spoil the party and delay the rate cuts.
This week, we’ll get a glimpse of the inflation picture, with the consumer price index on Tuesday and the producer price index on Wednesday.
It was a crazy day on Wall Street, with a lot of action in different markets, as Zero Hedge put it:
Bitcoin got slammed, oil prices dropped and bounced, the ‘Magnificent 7’ stocks stumbled, gold prices fell, and natural gas tanked. Bonds were mixed (yields slightly higher) and the dollar rose a bit.
Bitcoin stole the show today, as it faced a wave of selling pressure and a scathing attack from Elizabeth Warren – who blamed it for everything from climate change to inequality.
The short squeeze was on and off again, following last week’s erratic pattern. Since the last FOMC meeting, financial conditions have eased a lot, which makes me wonder if that will affect the Fed’s thinking on interest rates.
Will Powell stand his ground and defy market expectations on Wednesday? Or will he cave in and give the traders what they want?
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)
The major indexes recovered from a sluggish opening and ended the day with gains, with the Dow outperforming and the Nasdaq trailing behind.
Our TTIs mirrored this pattern and are firmly above their respective trend lines, indicating a bullish market.
This is how we closed 12/11/2023:
Domestic TTI: +5.11% above its M/A (prior close +4.19%)—Buy signal effective 11/21/2023.
International TTI: +4.70% above its M/A (prior close +4.27%)—Buy signal effective 11/21/2023.
All linked charts above are courtesy of Bloomberg via ZeroHedge.
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