johnealbert27

Hey Folks, another down week in the markets helps move indexes lower as records continue to be set. Get my take on where to from here in this Week’s Round-Up. WEEKLY SOUND BITES: The major indexes recorded another week of losses, as investors appeared to grow increasingly skeptical that the Federal Reserve will be able to achieve a “soft landing” for the economy by raising rates enough to tame inflation without causing a recession. It marked the sixth consecutive weekly decline for both the S&P and Nasdaq and the seventh for the Dow—the longest stretch for the latter since 2001. There is still plenty to worry about such as the Fed’s accelerated pace of monetary tightening, persistently high inflation data, worries about slowing growth, disruptions caused by China’s strict COVID-19 lockdowns, and Russia’s invasion of Ukraine. CPI data fell back a bit from March, rising 8.3% year over year versus consensus estimates of around 8.1%; likewise, core consumer inflation (excluding food and energy) pulled back less than expected to 6.2% versus 6.0%. Core producer prices rose a bit less than expected in April, but March’s monthly gain was revised higher to a record 1.2%. Consumer sentiment in May, released Friday, indicated the steep toll that inflation was taking on Americans’ confidence as the gauge fell much more than expected (to 59.1 versus consensus estimates of roughly 64) and hit its lowest level in 13 years. Survey respondents reported the worst conditions for buying appliances and other durable goods since researchers began asking the question in 1978. The smaller-than-expected decline in consumer inflation caused a brief jump in the yield of the benchmark 10-year U.S. Treasury note on Wednesday, but it ended sharply lower for the week as a whole and fell back below 3.0%. European Central Bank (ECB) President Christine “Queen Bee” Lagarde said their bond-buying program could end "early in the third quarter” and be followed by a rate increase "only a few weeks" later. Meanwhile, in the U.K. GDP unexpectedly contracted 0.1% in March, after stagnating in February, due mainly to a decline in service sector activity. The economy grew 0.8% in the first quarter, but this was below the 1.0% expected by economists and the 1.3% expansion that occurred in the fourth quarter of last year. Finland is expected to formally announce its decision to join NATO on Sunday along with Sweden which could cause more friction in Eastern Europe. Against the backdrop of monetary accommodation being reduced in the U.S. and Europe, the Bank of Japan (BoJ) reiterated the central bank’s commitment to its current monetary policy stance with more3 stimulus spending as necessary. Chinese stocks rallied as a fall in coronavirus cases and reassuring comments from the securities regulator lifted investor sentiment. On the inflation front, factory gate inflation jumped a higher-than-expected 8% in April following the previous month’s 8.3% increase. Enjoy this Week’s Round-Up Don’t Be A Rat Brain Trader – Be the Red Stripe Zebra !! Trade Smart ! hpb

Hello folks, the markets are showing a lot of exuberance and strength as we bounce from a bad week to a very strong one this week. How high can price action go? And do we even have a downside? Get my take on the current state of affairs in this week’s update; WEEKLY SOUND BITES: • Major indexes rebounded from the previous week’s steep losses, helped by fiscal stimulus plans and vaccine optimism...The large-cap S&P 500, Nasdaq Composite, and small-cap Russell 2000 indexes all reached record highs having the best trading week since last November...The social media-coordinated “short squeeze” targeting hedge funds with short positions in GameStop and a few other companies also abated, but buyers turned their attention instead to the silver market, sending silver prices to their highest level since 2013 where prices quickly came back down to earth...the Senate passed a budget resolution moving forward legislation authorizing the full $1.9 trillion “Wrong Way” Biden had requested...the froth in the markets continues to give an assist to the Option markets with over 44 million contracts traded on any given day which is up dramatically over the past few years... • Several of the week’s economic reports surprised on the upside...the ISM gauge of services sector activity rose to its highest level (58.7, with a reading above 50 indicating expansion) since February 2019. According to ISM data, the expansion in the services sector has now matched that in the manufacturing sector, which is less exposed to social distancing measures. Weekly jobless claims fell more than expected and reached their lowest level (779,000) since late November and on Friday, the Labor Department reported that employers had added 49,000 jobs in January, roughly in line with expectations, following the previous month’s downwardly revised decline of 227,000... • The yield on the benchmark 10-year U.S. Treasury note continued moving higher, propelled by vaccine news, improving economic signals, and stimulus hopes...investment-grade corporate bond credit spreads—the extra yield offered over Treasuries and an inverse measure of the sector’s relative appeal—tightened as several companies reported generally reassuring fourth-quarter earnings and investors monitored fiscal stimulus developments...the yield curve is the most sharply upwardly sloped its been for years...low rates are all helping the mortgage and housing markets with a record $4.04 Trillion in home loans originated last year as the Feds continue to gobble up $40 Billion of MBS each month...currently, close to 70% of stocks pay a dividend that is higher than the 10 Year Treasury but if rates continue to rise, they could cause a reallocation of money into Treasuries from equities... • Shares in Europe rose with global markets on hopes of a quicker economic recovery, spurred in part by hopes that the pace of coronavirus vaccinations would improve and by the prospect of more U.S. fiscal stimulus...Better-than-expected eurozone gross domestic product (GDP) data raised long-term inflation expectations, further lifting yields...The pace of COVID vaccination across Europe remained slow but have been picking up...while the number of daily COVID infections also started to fall in some countries after a month of strict lockdown measures across Europe...the ECB lowered its forecast for economic growth in 2021 to 5% from the 7.25% it predicted in November but raised its estimate of 2022 GDP growth to 7.25% from 6.25%. Enjoy This Week’s Round-Up; Don’t Be A Rat Brain Trader – Be the Red Stripe Zebra !! Trade Smart ! hpb

Hey Folks, markets are pulling back in the first trading month of January to finish in the red as Volatility comes back into price movement. I see this initial move lower continuing into February as traders take profits as Q4 Earnings continues...get my take on the current markets in this week’s update. Weekly Sound-Bites: • Major indexes declined sharply for the week amid much higher volatility and trading volumes. Large-cap indexes generally held up better than mid- and small-cap shares...Despite a busy earnings week in which 37% of the S&P 500’s market capitalization was due to post quarterly financial results, unusual fluctuations in the prices of certain stocks that are popular with individual investors appeared to drive the market and received the bulk of media attention. Encouraged by message boards on Reddit and other online forums, these investors seemed to collectively target stocks with high percentages of short interest through buying the shares...smaller retail traders are now accounting for more than 20% of the trading volume and when they concentrate on a few stocks, like GME, then they can make a difference...and daily option trading Volume has more than doubled since 2019 led by these same retail traders... • Amid the dramatic swings caused by short squeezes, the Feds January policy meeting took a back seat in terms of market focus. In the FOMC’s statement and in Fed Chair Jerome “Power Ranger Boom Boom” Powell’s post-meeting press conference on Wednesday, policymakers reinforced the message that the economic outlook remains uncertain and that it will be some time before the central bank begins to taper its asset purchases. The government also reported that overall economic growth slowed considerably in the fourth quarter...GDP grew at an annualized rate of 4.0%, in line with expectations, compared with 33.4% in the third quarter... • Yields on intermediate- and long-term Treasuries decreased slightly for the week. The yield on the 10-year Treasury note briefly reached 1.0% on Wednesday, benefiting from its status as a safe-haven asset amid the sharp drop in stocks, before increasing to finish the week. (Bond prices and yields move in opposite directions.) The municipal bond market produced relatively strong returns for most of the week. The constant demand for yield drove interest in municipals while supply underwhelmed, leading to a supportive technical environment...According to the firm’s traders, investment-grade corporate bonds were pressured in response to concerns surrounding coronavirus vaccine distribution and the status of fiscal stimulus... • European shares fell amid worries that the economy could slow due to the raging coronavirus pandemic and delays in the distribution of coronavirus vaccines...the European Commission said it would implement a mechanism allowing European Union (EU) countries to block exports of vaccine doses if their purchase orders had not yet been fulfilled while countries remain in lock down mode... Germany, France, and Spain reported relatively resilient GDP numbers for the fourth quarter, spurring hopes that the eurozone might avoid a deeper recession... • Chinese stocks recorded a weekly drop amid fears that the country’s central bank was turning more hawkish after it drained USD 12.1 billion in liquidity from the financial system and a senior central bank official warned of potential asset bubbles... China reported that industrial profits rose 20% in December from a year ago and increased roughly 4% for the full year after a slight decline in 2019. Next month, China celebrates its weeklong Lunar New Year holiday, albeit with tighter restrictions on traveling and gatherings as officials try to contain new virus outbreaks... Weekly Round-Up; Don’t Be A Rat Brain Trader – Be the Red Stripe Zebra !! Trade Smart ! hpb