The VIX Sent The Stock Market Higher, Not A 'Dovish' Fed

The stock market rally during Powell's press conference was due to the 2:35 PM ET VIX melt. Powell's recent press conference did not indicate a dovish stance on rate cuts in 2024. The immediate price action following the Fed meeting does not accurately reflect the market's longer-term direction.

Will U.S. Economy Stabilize In Q2 2024 After 2 Quarterly Downshifts?

Jobs: Household Report Is Way Below A Weak Headline Number

The BLS reported a gain of 175k jobs which was below expectations of about 200k. The Household Survey was high last month but came in way below the Headline number. The unemployment rate rose slightly to 3.9%. April saw a reversal where part-time jobs were replaced by full-time. The BLS report was released on the first Friday of every month.

The Jobs Report: A Soft Landing At Hand

Softer April Jobs Growth, Bulls And Doves Rejoice

April nonfarm payrolls increased by 175,000, below estimates, and pulled forward rate-cut expectations. Unemployment rate ticks up to 3.9% in April from 3.8% in March. Average hourly earnings came in softer than expected, signaling a decline in wage gains. Stocks futures jumped and yield plunged, but key data remains on tap.

April Jobs Report: Growth Cools Below 200K

Labor Department reports 175,000 jobs were added in April, well below expectations. Unemployment also ticked higher, while wage growth slowed further. Notable cooling occurred in both the healthcare and government sectors. The April jobs report is unlikely to change the Federal Reserve's current interest rate trajectory.

Federal Reserve Watch: The Beat Continues

Federal Reserve is committed to returning inflation to its 2 percent objective. The Fed will continue to reduce the size of its securities portfolio but at a slower pace starting in June 2024. $34.6 billion in securities came off of the Fed's balance sheet this past week.

Median Household Income In March 2024

Median household income increased in March 2024. Motio Research estimates the income earned by a typical American household increased by $906 (+1.2%) from its initial estimate of $77,265 for February 2024. The year-over-year growth rate of median household income has been essentially flat since September 2023.

The Fed Moves To Preserve Liquidity, But Investors Should Remain Cautious

The Federal Reserve announced a reduction in the quantitative tightening program, selling fewer US Treasuries and potentially leading to lower interest rates. Market reaction to the changes in quantitative tightening was muted. Investors should monitor metrics such as money supply, overnight reverse repo activity, and liquidity to ensure inflation does not reignite.

Fed Holds Rates Steady, Powell Doesn't See The 'Stag' Or The 'Flation'

Federal Reserve leaves rates unchanged as inflation progress stalls, pushing rate cuts expectations further out. Fed Chair Powell adopts a more dovish tone, mentioning stalled inflation progress. Powell dismissed the possibility of a rate hike and emphasized the strength of the economy. The QQQ is a buy.

National 'Debt' Issue Needs More And More Attention

Kenneth Rogoff warns against "magical debt thinking" and calls for developed countries to rebuild fiscal buffers and ensure debt sustainability. Too much government debt can slow down economic growth and disproportionately harm low- and middle-income citizens. The U.S. Has $34.6 trillion in government debt.

U.S. Employment Costs Reacceleration Incentivises The Fed To Be More Hawkish

US labour costs accelerated in the first quarter, led by the government sector. Hikes to state minimum wage levels contributed to higher private sector labour costs. This is the Federal Reserve’s favoured measure on labour market inflation pressures. Slowing quits rate suggests easing wage pressures... Eventually.

Stocks Sink In April As Inflation Fears Rise

The S&P 500 fell significantly in April, giving back a chunk of the year's gains. Higher interest rates amid hotter-than-expected inflation and growth data weighed on stocks big and small. The only area to finish in the green was the defensive Utilities niche.

Mega Forces: Why They Matter Now

Geopolitical risk has escalated in the Middle East. Hiroshi Watanabe sees escalating tensions in the region as a sign of a new geopolitical regime. He says mega forces, structural forces, are the right lens to look at the world. Watanabes says a productivity boom from artificial intelligence could ease supply constraints in the economy.

The Fed's Stagflation Problem

Stagflation is a combination of low economic growth and high inflation. The Fed is facing a conundrum as it tries to maintain a soft economic landing while reducing inflation. OPEC's manipulation of oil supplies and a housing shortage are contributing to inflation in the US. The United States suffered from two bouts of stagflation in the 1970s and early 1980s.

The Market Is Not Ready For What The Fed May Be Preparing To Unleash

The Fed must push back against easing financial conditions to get the disinflation trend back on track. The Fed needs to indicate that the number of rate cuts in 2024 will be less than previously projected. Market expectations show inflation is not expected to return to the 2% target anytime soon. The FOMC meeting in May may be a pivot point for the Fed.

Weekly Report: what happened at UOCT last week (0422-0426)?

S&P 500: Trade Of The Year. Week Starting 29th April (Technical Analysis)

S&P 500 is recovering in what could be a prolonged and complex corrective phase. The S&P500 should eventually drop below 4818 to set up the "trade of the year" Andrew McElroy looks at the probable path next week. The monthly and quarterly charts still have a bullish bias for new highs.

Fed Pivot? Traders Thwarted Again As Inflation Just Won't Go Away

Fed is expected to keep rates steady at its meeting next week. Traders have placed bets on a return to low inflation and low interest rates. Inflation continues to be a problem. The Fed is now expected to cut rates back to September. The stock market doesn't seem to care about the economy.

This Week's Massive Data Dump Could Send Rates And The Dollar Soaring

Financial conditions are tightening as inflation rises and disinflation stalls. Job data this week will determine if trends of higher yields and a stronger dollar will continue. This week will be loaded with job data, starting with the employment cost index for the first quarter. Technical indicators suggest higher rates and the stronger dollar, leading to wider spreads and lower stock prices.