Rate cut 1

US equity indexes closed on a broadly weak note, sp -32pts (1.1%) at 2980. Nasdaq comp' -1.2%. Dow -1.2%. The two leaders - Trans/R2K, settled -0.8% and -0.7% respectively.

sp'daily5

VIX'daily3

Summary

US equities opened in minor chop mode, and naturally remained that way into the 2pm Fed announcement.

The Chicago PMI 44.4, vs 50.5est. As June printed 49.7, the July reading is a SECOND consecutive monthly print under the key recessionary threshold of 50.0. This merits alarm bells, and its difficult to see how August might rebound >50. Eyes on related PMI and ISM manu' and serv' sector data across the next month or two.
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As expected, the fed cut rates by -25bps to 2.00/2.25%, with QT being concluded two months earlier than originally planned.

Powell tried to dance the fine line, claiming that the US economy remains favourable, but that monetary policy needs to be eased. The market was upset at the notion that it might be a 'one and done' cut, with the SPX imploding to 2958, before rebounding.

Volatility spiked, with the VIX printing 16.55, and settling +15.6% to 16.12.
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In AH, Trump shared his view on Powell and the Fed...

I expect Powell to be eventually replaced by Bullard, who will be more than happy to cut rates to negative, spin up the printers, and start buying T-bonds, but eventually... corp' bonds, student debt, infrastructure/build-America bonds, and ETFs/stocks.
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Fed rates with SPX

Behold! ... as I've added a new red dashed vertical red line.
*the actual interest rate will not update on that chart until August, as its an 'eom' (end of month) chart.
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Darkening skies over London

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Extra charts in AH (usually around 7pm EDT) @ https://twitter.com/permabear_uk

Goodnight from London
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Here come the rate cuts

US equity indexes closed somewhat mixed, sp -7pts (0.3%) at 3013. Nasdaq comp' -0.2%. Dow -0.1% The two leaders - Trans/R2K, settled +0.1% and +1.1% respectively.

sp'daily5

VIX'daily3

Summary

US equities opened on a moderately weak note, pressured by a number of things, not least some trade/tariff/fed chatter from Trump....

It does appear clear that Trump recognises the fed will only cut by -25bps tomorrow. The US President again noted his view that the fed should not have done QT. It is likely that QT will be ended two months early tomorrow.

The afternoon saw a lot of minor equity chop, still leaning on the weaker side. Volatility picked up, with the VIX settling +8.6% to 13.94.  


Here come the rate cuts

Wednesday will see rate cut'1, along with a probable early end to QT.

Fed rates with SPX

Tomorrow I'll add another red dashed vertical line to the above chart. That is no small matter.
I'm aware some believe it will be a 'one and done' situation, or just 2 or 3 cuts by early 2020.

Regardless, if you think rate cuts are an inherently 'good sign' for the US/global economy, I got some -10% yield Permabear corp' bonds I can sell you. You can pay me the negative yield via Paypal or Square, I really don't mind which.

yours... all payments in USD, as I sure as hell don't want anything in GBP, a currency that continues to depreciate.
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Not the best of summer days

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Extra charts in AH (usually around 7pm EDT) @ https://twitter.com/permabear_uk

Goodnight from London
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For details and the latest offers, see: permabeardoomster.com

 

Further Presidential fed bashing

US equity indexes closed a little mixed, sp -4.9pts (0.2%) at 3020. Nasdaq comp -0.4%. The two leaders - Trans/R2K, settled u/c and -0.6% respectively. Near term outlook offers moderate chop ahead of the fed.

sp'daily5

VIX'daily3

Summary

US equities began the week on a pretty subdued note, with opening chop, leaning on the slightly weaker side. Trump was active before the opening bell...

... with a double tweet follow up...

It would seem Trump is aware the fed will cut rates by -25bps this Wednesday, rather than -50bps.

Volatility remained broadly subdued, with the VIX settling +5.5% at 12.83. The s/t outlook favours moderate equity chop ahead of the Wed' 2pm announcement from the Fed. From there... things should get real interesting.
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A Korean giant ascending from the land of BREXIT chaos...

..as the GBP continues to depreciate towards parity with the USD.

A fine summer's evening

--
Extra charts in AH (usually around 7pm EDT) @ https://twitter.com/permabear_uk

Goodnight from London
--
If you value my work, subscribe to my intraday service. 
For details and the latest offers, see: permabeardoomster.com