Good Monday AM,
Markets are down and (I did expect equities would open in the red but I didn’t not expect the same for bonds) still reeling from Fed Chairman Powell’s speech last Friday. Mr. Powell made it clear he is happy to crash the economy to curb inflation. I am sure he is seeing what we are, the repeated signs that inflation has peaked AND that the economy is weakening but he needs to put an exclamation mark on this and the Fed needs to be the hammer (inflation would be retreating organically but that is for another conversation). The market needs to hear some acknowledgment of these facts. The equity markets spoke loudly after his talk, and while bonds are hanging in there, they are also not happy and showing signs of continued weakness. I am still looking for a meaningful bounce, but clearly Powell did not do anything to help on Friday.
That all said, markets are still betting against growth.
The net short positions have grown to levels not seen in two years. Tough to fight your way out of a bear market when the bets are that the indexes will fall further.
Friday brings the jobs report which is the biggest economic report of the month and will be a big mover for the markets. I don’t like floating into big data but I have to think most of the blood is already out of the patient.
Please remain safe and healthy, make today great.