Market Notebook

MARKET COMMENTARY

PRICE ACTION:
Equity prices, as measured by ticker SPY, and bond prices, as measured by ticker BND, closed lower on the week.

TECHNICAL ANALYSIS:
Both SPY and BND might be considered in an upward trend. Recent price action in BND suggests possible consolidation.

SENTIMENT:
The tight linkage between Federal Reserve rate policy, inflation, and equity market expectations was on full display last week as market participants reacted to economic data. The consensus view that inflation was well under control, thereby allowing the Federal Reserve to relax monetary policy, came into question with hotter-than-expected inflation data.

From a timeline perspective, market participants want to be on close lookout for recessionary conditions following the first rate cut after a tightening cycle. It seems likely that the first rate cut will be in 2024.

ECONOMY AND FUNDAMENTALS:
Economic indicators within the Market Notebook remain mixed.

Jobless claims are to be watched as an important indicator of a potential recession. Thus far, jobless claims are NOT indicative of a near-term recession.

All the best during the week ahead!

Disclaimer: Nothing in this discussion should be considered investment advice. The content of this discussion is strictly my personal opinion and subject to change at a moment’s notice. Investment advice can only be provided to you by your investment professional and not by a general market discussion such as this one. If you wish to speak with an investment advisor, contact us. We can probably help.