Wednesday, October 5, 2022

Morning Note: The Fed's Behest Will Be the Test

So, after an amazing two-day run, off of (per Saturday's video) severely oversold levels, now the test... No fewer than 7 Fedheads will be taking their respective podiums before the weekend.

The headlines suggest that yesterday's 3% surge in the S&P 500 was aided by a 1 million job openings hit (fewer) reported in the August Job Opening and Labor Turnover (JOLTS) Report released yesterday...  And, for sure, Monday evening's surprise lower-than-expected rate hike by Australia's central bank didn't hurt either... I.e., soft data (and other CBs citing the risks of over-tightening) means a softer Fed going forward, or so the story goes.

While, sure, the above didn't hurt, as we've pointed out of late, a rally was very due, regardless.

A giveback, to at least some degree -- at the behest of the aforementioned Fed speakers -- would make some sense right here... Although I suspect it'll be Friday's jobs number that'll determine whether this week goes down as a boom or a bust.

I'll keep this one brief and circle back shortly with your mid-week video analysis. 

Asian equities rallied overnight, with all of the markets we track (China's markets are closed this week) closing higher.

Europe's giving some back so far this morning, with all of the 19 bourses we follow trading lower as I type.

US stocks are stepping back as well to start the session: Dow down 2.75 points (0.91%), SP500 down 1.02%, SP500 Equal Weight down 1.07%, Nasdaq 100 down 1.03%, Nasdaq Comp down 1.22%, Russell 2000 down 1.19%.

The VIX sits at 29.48, up 1.41%.

Oil futures are up 0.88%, gold's down 0.88%, silver's down 3.78%, copper futures are down 0.49% and the ag complex (DBA) is up 0.05%.

The 10-year treasury is down (yield up) and the dollar is up a big 1.12%

Among our 35 core positions (excluding options hedges, cash and short-term bond ETF),  -- Dutch Bros, energy stocks, oil services companies, ag futures and emerging market equities -- are in the green so far this morning. The losers are being led lower by silver, AMD, Sweden equities, uranium miners and Eurozone equities.

"We ascribe to Lord Rothschild’s philosophy, which was to buy to the sound of cannons and sell to the sound of trumpets. You are supposed to buy when there is blood in the streets, so to speak."

--Jim Leitner

Have a great day!


  1. Much appreciated for the the market updates. Take care. Have a good day!