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There’s an old (but usually true) cliche for times like we’re in now: “Bad news is good news,” meaning, terrible economic news is great for the markets, because it could lead to looser policy at the Fed.
Well, if that’s true… you don’t have to be Warren Buffett to figure out what good data could mean.
Look at the way markets behaved this week – starting with the SPX, the Mother of All Products. For the week’s first two sessions, we got nothing. A test pattern. Completely stagnated. Low volume, zilch.
Wednesday, we got the FOMC minutes which, for the first time in a while, indicated a willingness to raise rates because inflation is still too damn high. This at a time when the market is still anticipating one cut (though the big boys like Goldman have said they expect no cuts in 2024).
These FOMC minutes were as hawkish as it gets, and the markets barely reacted to this at all, save for a quick dip and a rally back.
Like I’ve said, this screams “complacency” (or denial). Meanwhile, the VIX – the workin’ Joe’s volatility yardstick – below 12. PMI data this morning failed to jolt markets, too.
This probably isn’t going to end well.
We’re going to talk about what this all means – the big picture – and what to do about it right now. Watch…
