Yesterday’s Federal Open Market Committee (FOMC) meeting was a loud, raucous session where Fed Jerome Powell couldn’t even hear himself think, so he had to refer to his notes, but even then, he was confused. During his rambling, he gave just enough clues to leave the Street with the impression some FOMC members were pushing for a rate cut.

Play That Funky Music

It was already a jam session with semiconductors on the electric guitar. Nvidia (NVDA) rocked out the most, but every name joined in, including ASML Holding N.V. (ASML), on word the Biden Administration is backpedaling on plans to block China from getting specific chips. VanEck Vectors Semiconductor ETF (SMH) popped more than 7.0% on a big spike in volume.

NASDAQ-100 Index (NDX) Still In Downward Bias

The NDX crushed it, but it's still crushed short-term.

Money flow will probably pick up as the index rallies. First, fill a sizable gap, and then fill an even more significant upside gap.

Greed?  You Ain’t Seen Nothing Yet

After swinging into ‘fear,’ the gauge has swung back into ‘greed,’ and judging from the initial reaction to Meta (META) and other reports last night, investors might get a lot greedier.

Mumbles to the Rescue

The old Dick Tracy comic strip had a character named Mumbles. He was a brilliant criminal, but only a few could decipher his words.

For some reason, I thought of him yesterday as I watched the FOMC question-and-answer period. It's clear Powell wanted to stay on messages, so he was flipping through his book of prepared replies the way I would flip through a Cheesecake Factory menu.

The only takeaway came from an off-the-cuff remark about their decision to cut rates now. Some members were eager to do that even if they unanimously voted to ‘stand pat.’

Today’s Session

Initial and continuing claims came in above consensus adding credence to those worried the jobs market is in worse trouble than the Fed assumes.  I’m on that list.

Powell and most Wall Street economists are using “normalization” to describe the pullback. These spikes tend to accelerate, not stop on a dime as imagined in a soft landing scenario.

Initial Jobless Claims

Continuing Jobless Claims

I’d like to see major indices take out yesterday’s intraday highs, which stumbled on news of Iran’s intentions to retaliate against Israel.

It’s not going to happen today, or maybe any time soon, but geopolitical risks continue to rise as a headwind for markets.

Comments

Iran would be stupid to use nukes on Israel. The result would be that Iran would get radiation blown back all over its land. Israel may take out the Ayatollah AND their nuclear capability at the same time. David Thompson on 8/1/2024 11:49:13 AM

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