Wednesday 27 February 2019

QT to be cut to zero

US equity indexes closed a little mixed, sp -1.5pts at 2792. Nasdaq comp' +0.1%. The two leaders - Trans/R2K, settled -0.5% and +0.2% respectively.




US equities opened a little weak, but the bears could only manage moderate declines to 2775. There was a rally into the early afternoon, with a touch of renewed weakness into the close. Volatility saw the 16s, but then resumed melt mode, and settling -3.1% at 14.70.

QT to be cut to zero

Powell effectively confirmed today, that the balance sheet reduction program, aka Quantitative tightening (QT), will be cut to zero before year end.

The end of QT is over a year ahead of schedule, as initially outlined last Sept/October. A rate cut will then be next, and that will merit as the ultimate equity sell signal... as it was in Sept'2007.

I am open to the more bullish scenario of new index historic highs, before QT ends, and the subsequent rate cut. The Thursday/end month settlement will be very important.

Another exceptionally warm day in the London metropolis

Extra charts in AH (usually around 7pm EST) @

Goodnight from London
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