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The S&P 500 is like a plane in a holding pattern, trading mildly higher. Nothing to write home about… nothing to get excited about… right?
Well, traders are digesting the 50-basis-point rate cut we got last week – and weighing the 50/50 proposition that the Fed may cut another 50 basis points at their November meeting.
That’s a lot of cutting, front-loading policy to prevent a recession. According to Fed President Austan Goolsbee, there are “a lot of cuts to come” over the next year.
So, a lot for traders to think about, and that shows in the tape. A smattering of S&P 500 are trading higher, led by 4% session gainer Tesla. Consumer staples, energy, and utilities are moving higher. Then again, plenty of other stocks have gapped lower.
It’s as though the market is confused as to what to make of it all.
We’re going to make some sense of it tonight. We’re going to pay special attention to the bond market, too, where a selloff hit last week. Are T-notes ready to find a bid… or does the inflationary outlook loom large as the yield curve steepens.
Let’s get started…
