I argue that the recent 50 basis points rate cut by the Fed signals a weak economy. The consumer base is struggling, as many people can’t afford to live comfortably, which further supports my belief that the economy is not doing well. However, I wonder if I might be viewing this too narrowly. Perhaps I don’t fully understand how corporate earnings can be strong if the purchasing power of the middle and lower classes is not. Regardless, the reality is that these groups are facing challenges, and with unemployment still a concern, overall consumer confidence and spending are being negatively affected. So how can the S&P 500 be at an all-time high?
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50 bps came as a surprise to many, who were expecting 25, if there was to be a cut at all. Inflation is still above the Fed’s target. It has been suggested that this was a political move to gun the economy ahead of the November election.
One thing this rate cut will do is increase buy backs
Oh yeah! I agree. Such a political move. Trump made a public statement telling Powell not to lower rates before the elections.
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This defensive positioning, especially the high allocation to utilities and low exposure to cyclical sectors like energy and materials, aligns with historical patterns seen near market lows, not tops.
So, would you make a bet that the S&P 500 won’t end the year at $6,200?
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I believe we’re at 5,702.55 today.
No, I wouldn’t make that bet.
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JPM has the S&P 500 ending the year at $4,200. They have not revised their numbers.
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So they’re betting it’s going to drop 26% by year’s end.
And Jamie Dimon is still forecasting a hard landing. He may well know something we don’t.
Much of the data coming out of the Biden administration is junk, like the jobs reports that are quietly revised downwards much later, and JPM likely have their own, more accurate, data.
Yeah! But it’s odd that they’re the only bank with such an extreme number. Most of the banks, including Goldman, were at $5,500.
agreed, odd indeed
We had an amazing jobs report this week that blew away all expectations.
Zerohedge is attributing it to a record surge in government workers
Behind Today’s Stunning Jobs Report: A Record Surge In Government Workers
Chart stolen from Zerohedge
It helps Kamala and avoids a market crash
