Today’s core PCE numbers came in a little hotter and the Super Core PCE rose for a 50th straight month; nevertheless, we are now pricing in a 90% chance of a September rate cut. This is just the way things are now and if you’re against rate cuts you’re probably insane or dependent upon incoming generating instruments.
The Dow is up over 600 today, mostly due to $MMM soaring 17%. Aside from that, it’s a rather mundane listless rally day, with both the Nasdaq and Russell up around 0.8%. There is relative weakness, once again in BIG TECH: $AAPL, $GOOGL, $TSLA all lower for the day. As for the semis, the index is up but the core tenant $NVDA is only higher by 0.30%. I hate to allude to the possibility; but given the horrific pin action of recent late days, we could always give back all of the gains in the NASDAQ and not be surprised by the outcome.
I think it’s important to note that markets are typically robust during the summer and earnings haven’t been a reason to sell. The impetus for the recent rout in tech was based on overvaluation. Things got too good for too long and they needed to moderate. Has the selling ended and we can now sail smoothly in the most contentious election to date?
Probably not.
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