Morning Note: Careful With (reacting to) That Headline

Before we get into this morning's brief message, two heads up:

1. Blog posts will be a bit sparse for the next couple of weeks as I devote my writing time to our year-end message.

2. Clients, today is "ex-dividend" day for the majority of the ETFs in our core portfolio... So, if you're one to frequently check your account, you'll note that today's move won't jibe (it'll be lower) with asset markets, as shares will reflect the dividend payout... This Thursday you'll notice a difference as well (it'll be higher), as those dividends are credited to your account(s).

Morning Note: Non-Fundamental Factors and a Quote to Keep in Mind

In yesterday's video commentary I -- in reference to the abundance of short-dated options being traded of late, and to today's massive expiration -- suggested that factors other than fundamentals, and other than the retail trader may be aware of, can move the market in a big way, in a hurry.

Economic Update: Consumer Spending Sustainability in Question (video)

Once playing, click the icon in the lower right corner for full screen. Focus should occur after a few seconds; if not, click the wheel to the left of the YouTube icon to adjust:

Attention Non-Client subscribers: Nothing in this video should be construed as investment advice. The examples expressed relate to portfolio management we perform on behalf of our clients, and, again, under no circumstances are they to be considered recommendations to the viewer.

Stock Market Snapshot: Are Stocks Beginning to Price Recession Risk?

Once playing, click the icon in the lower right corner for full screen. Focus should occur after a few seconds; if not, click the wheel to the left of the YouTube icon to adjust:

Attention Non-Client subscribers: Nothing in this video should be construed as investment advice. The examples expressed relate to portfolio management we perform on behalf of our clients, and, again, under no circumstances are they to be considered recommendations to the viewer.

Morning Note: Key Highlights

So, the Fed delivered the expected .50% rate hike, but, on balance, didn't deliver the bulls the assurance that they're near-done with their quest to put the screws to what, in key areas, remains stubborn, or sticky, inflationary pressures... Hence, stocks finished the day moderately lower.

Morning Note: It's ALL About the Fed, Now and Next Year

While the CPI report inspired yet another wild day of action in equity markets, when we get right down to it, it's really all about what transpires during J. Powell's post-Fed-meeting press conference later today.

In fact, allow me to rephrase the above: Yesterday morning's softer than expected CPI report initially got traders thinking that Powell will play the dove tomorrow, until, that is, they, perhaps, realized that the stuff Powell says the Fed's focused on remained elevated in price, and that a rallying market defies the Fed’s desire to keep financial conditions tight, and that last week's PCE read (which came in hotter than expectations) is the Fed's preferred measure, yada yada. 

The Feel From Small Business

This morning's release of the National Federation of Independent Business (NFIB) -- i.e., small business -- Optimism Index (an input to our "PWA Index") jibes pretty well with our present assessment of overall general conditions, and with this morning's inflation read from the CPI report.

Recall that we see odds favoring recession in 2023, although, at this juncture, we see it to be mild by historical standards.