S&P 500 Battles Resistance as Rate Cut Hopes Hang in Balance: Reversal Imminent?
Stocks finished lower yesterday as rates rose globally and the dollar strengthened. Many forces are at work, making for a potentially volatile situation for the stock market, especially as we head into earnings seasons.
yesterday, the VIX popped up above that 14.5 level as the VIX opex has now passed, and whether the VIX continues to move higher will largely depend on the macro factors in the market.
This will also depend on how the market adjusts to this idea that the Fed most likely won’t be cutting rates 6 or 7 times between now and January 2025.
Especially if the data continues to come in, like the CPI report, the jobs reports, and yesterday’s retail sales data, which was hotter than expected.
The timing of this may be just as important because this weekend, we will also enter the Fed’s blackout window; whatever taste the governors and board members have left in their mouths won’t be going away.
The market will get a heavy dose of Atlanta Fed Gov. Bostic and SF Fed Governor Daly; both see rate cuts later this year, and Bostic only sees 2.
They are both voting members this year as well. Their message will likely be similar to what we have heard regarding rate cuts for weeks.
Additionally, one could argue that even if the pace of inflation slows and the economy stays healthy, there may not even be the need to cut rates.
If the policy were truly restrictive, I would think that by now, we have seen the effects on the economy.
Either that, or inflation isn’t as low as the CPI report makes it seem, and the effects of falling oil prices have masked the higher inflation rates that persist in the economy.
Yesterday, the S&P 500 finished below the 10-day exponential moving average.
While it is only one day, the fact that the
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