Fed rate-hike odds rise to 70% after PPI
After the producer price index release, fed fund futures were indicating about a 70% probability of a rate hike next week. Headline PPI was 0.4% versus 0.4% consensus, while core PPI was 0.2% versus 0.3% consensus.
Free Money Proposal Please click here for an enlarged chart of Invesco QQQ Trust Series 1 (NASDAQ: QQQ ). Note the following: The chart shows QQQ has been vacillating between zone 1 (resistance) and zone 2 (support). The chart shows QQQ is seeing selling today in the early trade as rising oil and rising yields blunt buying on the free money proposal. S.
adult if the GOP wins the midterm elections. S. 65T. There is no clarity how the free money will be financed.
There is a suggestion of funding it with tariff money. The reality is that when it is all said and done, most of the money will be borrowed, adding to the over $40T national debt. Free money will be a bonanza for the stock market. There is a precedence of free money flowing into the stock market from pandemic times.
Most of the money flowing into the stock market will likely go into highly speculative stocks that are touted in the media. Pumpers will have a heyday. Even though in the short term it would be a huge positive for the stock market, in the long term it would be a big negative. S.
S. pressure is not working. President Pezeshkian of Iran, President Xi of China, and President Putin of Russia will arrive in India tomorrow for a BRICS summit. ’s dominance in the world.
Prudent investors should note BRICS countries are also aligned to reduce the importance of the king dollar. S. in the long term. An antidote for investors is to have a portion of their portfolios in emerging markets.
The momo crowd is oblivious, but prudent investors should pay attention to an important development in Yemen. Iran backed Houthis have won the battle for the port city of Mokha. This may be a turning point in the civil war in Yemen. The reason investors should care is that Houthis may end up asserting more control over Bab el-Mandeb Strait, which is one of the most important trade routes, especially for oil these days.
Houthi victory has triggered WTI oil to spike above $100. S. standard for oil. Previously, we shared with you that Brent, which is the international standard, had gone above $100.
The Treasury tripled its long bond buyback to $6B from $2B. The purpose was to bring long yields down. Prudent investors should note that the bond market responded by snubbing Treasury Secretary Bessent’s efforts. Long yields went higher instead of going lower.
Initial jobless claims came at 206K vs. 208K consensus. Producer Price Index (PPI) came roughly inline. 4% vs.
4% consensus. 2% vs. 3% consensus. 4% by itself is a hot number.
8% at the producer level. The main reason is rising oil. After the release of PPI data, Fed fund futures are now indicating about a 70% probability of a rate hike next week when the Fed meets. Consumer Price Index (CPI) will be released tomorrow at 8:30am ET.
University of Michigan Consumer Sentiment will be released tomorrow at 10am ET. Europe At a time when the Fed has been reluctant to fight inflation, the European Central Bank (ECB) has been aggressive in fighting inflation. 25%. In our analysis, the ECB move will put additional pressure on the Fed to raise rates.
Magnificent Seven Money Flows Most portfolios are now heavily concentrated in the Mag 7 stocks. For this reason, it is important to pay attention to early money flows in the Mag 7 stocks on a daily basis. In the early trade, money flows are positive in Apple Inc (NASDAQ: AAPL ). com, Inc.
(NASDAQ: AMZN ), Alphabet Inc Class C (NASDAQ: GOOG ), Meta Platforms Inc (NASDAQ: META ), Microsoft Corp (NASDAQ: MSFT ), NVIDIA Corp (NASDAQ: NVDA ), and Tesla Inc (NASDAQ: TSLA ). In the early trade, money flows are negative in SPDR S&P 500 ETF Trust (NYSE: SPY ) and Invesco QQQ Trust Series 1 (NASDAQ: QQQ ). Momo Crowd And Smart Money In Stocks Investors can gain an edge by knowing money flows in SPY and QQQ. Investors can get a bigger edge by knowing when smart money is buying stocks, gold, and oil.
The most popular ETF for gold is SPDR Gold Trust (GLD). The most popular ETF for silver is iShares Silver Trust (SLV). The most popular ETF for oil is United States Oil ETF (NYSE: USO ). 3M barrels vs.
3M barrels. Bitcoin Bitcoin (CRYPTO:BTC) is seeing selling. What To Do Now Consider continuing to hold good, very long term, existing positions and add tactical positions based on signals. The Arora Report is known for its accurate calls.
The Arora Report correctly called the big artificial intelligence rally before anyone else, the new bull market of 2023, the bear market of 2022, new stock market highs right after the virus low in 2020, the virus drop in 2020, the DJIA rally to 30,000 when it was trading at 16,000, the start of a mega bull market in 2009, and the financial crash of 2008. Please click here to sign up for a free forever Generate Wealth Newsletter. Disclaimer: This article is from an unpaid external contributor. It does not represent ’s reporting and has not been edited for content or accuracy.