Midweek weak bounce

US equity indexes closed rather mixed, sp -3pts (0.1%) at 2913.  Nasdaq comp' +0.3%. The two leaders - Trans/R2K, settled +0.7% and -0.2% respectively. Near term outlook favours the bears.

sp'daily5

VIX'daily3

Summary

US equities opened moderately higher, partly inspired on a CNBC report that Munchin said trade talks "... we are about 90% of the way...", but CNBC soon changed that to "... we were about 90% of the way...". That didn't help, with equities almost cooling to breakeven. Price action was choppy, and leaned lower into the close.

Volatility churned, with the VIX settling -0.4% at 16.21. The s/t cyclical setup offers Thurs/Friday equity cooling, although end month/Q1/H1 issues will confuse things.

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VIX threatening problems

US equity indexes closed broadly weak, sp -28pts (0.9%) at 2917. Nasdaq comp' -1.5%. The two leaders - Trans/R2K, settled -0.9% and -0.6% respectively.

sp'daily5

VIX'daily3

Summary

US equities opened in minor chop mode, but then leaned weak into the late afternoon. Comments from Bullard - that a 50bps cut in July would be 'overdone', didn't help.

Volatility picked up, with the VIX settling +6.7% at 16.28. Daily momentum is set to turn positive within 1-2 days, and that does offer a push to the key 20 threshold, and that would clearly bode for sig' equity downside.

Meanwhile... the US President continues to tout equities, and thanks himself for this.

As noted yesterday, it won't take much more than a 4-5% cooling wave to see Trump riled up, and calling for Powell to be replaced by uber-doves Bullard or Kashkari.

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The complaints continue

US equity indexes closed on a weak note, sp -5pts (0.2%) at 2945. Nasdaq comp' -0.3%. The two leaders - Trans/R2K, settled -1.5% and -1.3% respectively.

sp'daily5

VIX'daily3

Summary

US equities began the last week of June in micro chop mode, and remained that way for the day. Volatility was itself subdued, with the VIX settling -0.9% at 15.26.


The complaints continue

Despite the SPX breaking a new historic high just last Friday, the US President can't contain himself...

Sunday's 'meet the press' interview saw Trump take another swipe at the Fed.
Further, Trump began his Monday on Twitter with a double tweet...

It should be clear, ANY degree of equity cooling, even a mere 4-5% will be met with fierce Trump complaints, and he'll be calling for Powell's head on a platter. Bullard and Kashkari are standing by. My money is on the former, who would be the fastest to spin up the printers.

Meanwhile, today saw Bernie Sanders leading a campaign to cancel the mountain of student debt.

A valid scenario... a democrat victory in 2020, with Print Central buying up 50%, if not ALL of the student debt as part of QE4. Hell, even many of the Republicans would likely support it.

Bernie would absolutely support QE4, although he'd clearly also want some kind of Wall Street transaction tax. Regardless... we've another 16mths until the vote, and it seems likely QE4 will have begun way before then. 

First things first though...

Its notable that only 16% expect 3 or 4 rate cuts before year end. Rate cut'1, a 25bps cut to 2.00/2.25% is due July 31st. Its possible the end date for QT will be moved forward from end Sept' to end July, rather than a 50bps cut as some are crying for.

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