Friday 29 March 2019

The Rate Cut

US equity indexes ended the month/Q1 on a broadly strong note, sp +19pts (0.7%) at 2834. Dow and Nasdaq comp' both settled +0.8%. The two leaders - Trans/R2K, settled +0.9% and +0.3% respectively.




US equities opened moderately high, and whilst the opening gains were a little shaky, there was very little selling pressure, as the mainstream were very much focused on the LYFT IPO. The afternoon saw a lot of chop, but leaning upward, helped by Kudlow and a light sprinkling of end month/Q1 'window dressing'.

Volatility was naturally subdued, settling in the 13s, and fully reflective of a complacent mainstream.

The Rate Cut

If you've garnered anything from yours truly, I would hope its the notion that a rate cut will (ironically) be the ultimate equity sell signal.

Today saw Kudlow calling for an immediate 50bps cut, whilst Fed official Quarles said further hikes might be necessary. 

Rate cuts are a bearish sign

SPX, fed rates, 20yr

We've already had our precursor signal of an end date for QT. Its not a question of if rates are cut... but when. Right now, I'd look to the FOMC of Oct'30th or Dec'11th.

Sunset 6.10pm GMT. In two days that will jump to around 7.12pm BST

A Lyft coloured wheel of doom!
Extra charts in AH (usually around 7pm EDT) @

Goodnight from London
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