The first trading day of September began on a broadly bearish note, with the SPX seeing weakness to 2891. Not surprisingly, the early morning saw the US President take yet a mild swipe at the fed...
Whilst some are already crying for negative rates and renewed QE, neither will solve the underlying structural problems.
The afternoon saw a great deal of chop, with a little ramp into the close, but still settling broadly weak. Volatility picked up, with the VIX settling +3.6% to 19.66. S/t outlook will favour the equity bulls early Wednesday, but bounces are to be seen as such.
A collective 77% believe we'll see 1-2 rate cuts by year end. We're clearly getting another rate cut Sept'18th, and I do see two more at the FOMCs of Oct'30th and Dec'11th.
I'm not entirely surprised to see Gold lead, as the gold bugs are a feisty group online. It is the case though that yields/rates look set to broadly fall into 2020, and US bonds deserve more attention.
Its entirely possible BREXIT will be delayed, or even outright cancelled. I would agree trade/tariffs remain a massive issue, although its more about confidence, than actual economic significance. I'd also liked to have added US/Iran and India/Pakistan, as simmering geo-political flash points.
In any case, trading day one of September was pretty interesting, the other twenty should be equally, if not more dynamic!
|Moody skies, reflective of geo-political BREXIT chaos|
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Goodnight from London
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