Today Market August 2022

Market refuses to decline. Keep bouncing back.

Btw, in poor countries, they eat dogs.

Wednesday will be important. CPI data for July will be released, and two Fed presidents will speak on that day.

8:30 am Consumer price index July 0.2% 1.3%
8:30 am Core CPI July 0.5% 0.7%
8:30 am CPI (year-over-year) July 8.7% 9.1%
8:30 am Core CPI (year-over-year) July 6.1% 5.9%
10 am Wholesale inventories (revision) June 1.9% 1.7%
11 am Chicago Fed President Charles Evans speaks
2 pm Minnapolis Fed President Neel Kashkari speaks

His logic is that the 10y treasury’s PE is over 30 but S&P is only around 20. Stock is so much cheaper and money will flow there as a result.

His justification is not right as he failed to focus fundamentals.

Market is focused on fundamentals moving money from stocks to 10Y.

Apr 2021 onwards, fed reverse repo increased gradually to 2T (most short term money market goes here).

Now, market sees economic issues longer time, and moving to 10y as safe heaven assets now. This is going to invert the yield curve soon.

Such bullish talks, mostly marketing, end up like Cathie wood.

Either bullish or bearish trend , mandatory for investors to be right to make money.

Same old formula, no fight with fed. When they print QE money, market is bullish, when they do QT market is bearish.


Market is expecting Fed could pause rate hike after the “unusual” large hike in Sep and likely reverse in 2023. Risky to front run this expectation but that is what some traders do.

Yes, this is known and already J powell indicated. FED is pausing after Sep hike, and that may likely end the FED rake hikes for many years. However, yield curve will be inverted that leads a recession.

By all means, my guess, it is exact replica of 2008 downturn (but not real estate downturn ).

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High growth stocks rally 5-10%. Declining CPI is :+1: for growth.

Some 15-20% :moneybag:

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:money_mouth_face: :moneybag:

Look forward to $178 :slight_smile: