Market Notebook

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

SPY    +4.01%
BND    +0.52%

TECHNICAL ANALYSIS:
SPY price recovered nicely during the last week, undoing much of the damage from the prior week. As such, SPY could once again attempt to break higher through resistance. Until it does, SPY should be considered in consolidation.

BND price appears to have established a relatively new upward trend.

SENTIMENT:
Market participants reversed their negative feelings from a week earlier pushing prices back towards recent highs.

ECONOMY AND FUNDAMENTALS:
Throughout the tightening cycle, jobless claims have never indicated a recession by our measure. We will continue to monitor weekly jobless claims closely.

The 12-month trimmed mean PCE is below the long-term average, meaning the Federal Reserve is already within a window within which it could cut interest rates at any time.

The first rate cut could happen at the next Federal Reserve Board meeting. Market participants should be on the lookout for recessionary conditions following the first rate cut after a tightening cycle. To avoid recessionary conditions, the Federal Reserve will have to get the timing of rate cuts exactly correct. Thus far, the Federal Reserve has managed the economic cycle well.

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.