- Moving the market
The major indexes experienced an upward climb as the Producer Price Index (PPI) increased by only 0.1% last month, compared to the anticipated 0.2% rise for July, which would have matched the previous month’s increase.
This modest rise in PPI provided hope for those advocating for a dovish shift in Federal Reserve policy. However, it also raised concerns about potential negative impacts on corporate profitability and, consequently, stock prices.
Despite these concerns, traders remained optimistic ahead of the more significant Consumer Price Index (CPI) report due tomorrow, driving the broad market higher. The CPI is expected to show a 0.2% increase, following a 0.1% decline in June. An outcome in line with expectations could bring temporary stability to the markets after last week’s volatility.
Hedge funds played a crucial role in the market’s recovery by buying into the selloff, helping major indexes recover from significant losses and reducing downside risk for the time being. Nevertheless, I expect volatility to persist due to the uncertain outlook of the US economy and the upcoming Presidential elections.
The dollar index fell to its lowest level in four months, while the MAG 7 stocks continued their recovery, aided by another short squeeze that has now erased approximately 50% of last week’s decline.
Bond yields also slipped, with the 2-year yield dropping below the 4% mark as rate-cut expectations increased. Bitcoin regained its footing, reaching the $61.5k price point, while crude oil prices dipped. Gold showed moderate gains and remained near its record highs.
Traders are eagerly awaiting tomorrow’s CPI report, but equally important and potentially market-moving will be Nvidia’s earnings report.
Continue reading…
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 session began on a positive note, thanks to a Producer Price Index (PPI) report that exceeded expectations. This optimistic data set the stage for bullish market sentiment, propelling the market upwards.
The rally was widespread, and our TTIs reflected this momentum, demonstrating a solid advance across the board.
This is how we closed 08/13/2024:
Domestic TTI: +4.42% above its M/A (prior close +3.24%)—Buy signal effective 11/21/2023.
International TTI: +3.53% below its M/A (prior close +2.18%)—Buy signal effective 11/21/2023.
All linked charts above are courtesy of Bloomberg via ZeroHedge.
———————————————————-
WOULD YOU LIKE TO HAVE YOUR INVESTMENTS PROFESSIONALLY MANAGED?
Do you have the time to follow our investment plans yourself? If you are a busy professional who would like to have his portfolio managed using our methodology, please contact me directly to get more details.
Contact Ulli