Mish’s Daily: FOMC Lowers Rates Aggressively on Hump Wednesday
Mish’s Daily: FOMC Lowers Rates Aggressively on Hump Wednesday
Written by Michele ‘Mish’ Schneider
Are we over the hump?
Those of you who do not look at X, here is a great summary of today’s FOMC by the Kobeissi Letter:
1. Fed cuts interest rates by 50 bps for first time since 2020
2. Fed sees 2 more 25 basis point rate cuts in 2024
3. One Fed governor (Bowman) dissented for the first time since 2005 in favor of a 25-bps rate cut
4. Fed gained “greater confidence” that inflation is moving to 2%
5. Fed will “carefully assess incoming data” and evolve outlook
6. Fed sees 100 bps of rate cuts in 2025 and 50 bps of cuts in 2026
The long awaited “Fed pivot” has officially begun.
However, not so fast in celebration-
The last 2 times the Fed’s first cut was 50+ bps:
Jan 3, 2001 – S&P 500 fell ~39% next 448 days which led to a recession
Sep 18, 2007 – S&P 500 fell ~54% next 372 days – Unemployment rose another 5.3% – Recession.
Yet, this is so very different than 2001 and 2008.
The tech bubble looks more like a tech correction.
And there is no real estate crash or mortgage debacle.
So, what happens at least for the rest of this week?
Perhaps we get the soft landing.
And perhaps stagflation becomes the newest mantra with a lot more easing on the table-or as I say on media:
Stagflation is a speed bump to recession.
Regardless, Granny Retail XRT continues to have my attention.
I will follow her. Over 80 I am all in on a bull run in equities.
Under 70, I am cautious, if not bearish, in equities. And Commodities?
We have to watch the dollar to see if 100 holds or not.
Unless there is a significant rally, a bounce from here should not be too impactful.
However, if there is a huge drop under 100, that would reduce Granny’s purchasing power, drive prices higher and give us that stagflation.
For commodities? We recommend you watch DBC and DBA and forget CPI PPI and PCE.
At this point, DBC (article yesterday) must make up its mind.
But DBA looks about to tackle the 2024 highs. Both will tell you better than anything else where hard assets are going and in turn, inflation.
Educational purposes only, not official trading advice.
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Mish in the Media
MarketGauge.com Mish and Geoff discuss how to anticipate and trade current market conditions using MarketGauge’s Big View market timing ratio, the XRT ETF and more. 09-17-24
Stockpick.app StockPick.app presents Mish’s lessons in understanding bonds 09-17-24
Business First AM Mish on 3-D printing and a stock to follow 09-16-24
ProInvestor Insights A comprehensive monthly guide for investors-see Mish’ article on EVs and the future 09-15-24
WealthWise CrossCheck Fed rate cut predictions and top picks 09-13-24
Schwab Network with Nicole Petallides From metals to solar to EVs to vanity trades-mish covers it all 09-12-24
Financial Sense with Cris Sheridan On Commodities, Stagflation and Big Spending 09-13-24
Business First AM Listen to Mish’s optimism and trade pick to hang onto 09-13-24
Maggie Lake Mish and Maggie explain the signs to look for before making your next investment decisions 09-09-24
Stockpick.app Mish talks why Tesla interests her right now 09-10-24
Business First AM Why some discretionary stocks are on Mish’s radar. 09-09-24
Business First AM What would hurt the tech rally and the Nvidia Cultists? 09-06-24
CNBC Asia Street Talk A clip on tech, NVDA and where the stock is a buy 09-05-24
*Lead-Lag with Michael Gayed 40 minutes and everything we believe could happen in the upcoming year 09-04-24 A better link published soon
Coming Up:
September 19 Kitco News Interview with Jeremy Szafron
September 25 Singapore Radio
September 26 Love Coaching for Members
September 27 Real Vision
Weekly: Business First AM, stockpick.app
ETF Summary
(Pivotal means short-term bullish above that level and bearish below)
S&P 500 (SPY) 560 pivotal
Russell 2000 (IWM) 210 pivotal 220 resistance
Dow (DIA) New all-time high and reverse???
Nasdaq (QQQ) 465 support 477 resistance
Regional banks (KRE) 57 pivotal and a sector to watch
Semiconductors (SMH) 230 support 240 pivotal- a crash here not healthy
Transportation (IYT) 67.00 support-this liked the rate cut
Biotechnology (IBB) 145 support 150 resistance
Retail (XRT) 73.50 support 77 resistance
iShares iBoxx Hi Yd Cor Bond ETF (HYG) Made a new high and closed on the lows of the daily range-keep watching
20240919
