Stocks have so far defied the weak September seasonals while volatility stays suppressed. SPX was roughly flat this week, after some tariff legality headlines and interest rate concerns briefly spooked the market. SPX tested the 50-day moving average and was immediately bought back up.
This type of price action tells us that the market is well-supported and the near-term direction is up. It seems like every investor is expecting a selloff in stocks and flare-up in volatility… but as we wrote last week, we think any pullbacks will be shallow and dips can be bought.
The more pressing concern is how stocks will react to the econ data prints over the next few weeks leading up to the Sept FOMC meeting. Markets are on edge because they want weak data to prompt a rate cut, but not too weak that it triggers a recession. They want strong data but not too strong that it spurs inflation. More on this in the econ section below. It is incredibly hard to thread the needle in uncertain times as this, so markets are understandably jittery.
In order to successfully time the market in environments like this, and predict near-term direction, one must have a strong grasp of the macro-economy. And that leads us to…
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Weak jobs data
Economic surprise!
The crypto trade on pause
Gold breakout
Chip stocks poised to break out
Our portfolio and recent changes
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