sp'daily5
VIX'daily3
Summary
US equities opened moderately weak. The release of Powell's prepared remarks saw equities claw back upward to fractional gains.
Powell appeared at 11am...
... and carefully danced the fine line, trying not to upset the capital markets. As for the 'new normal', normal within the twilight zone remains the stuff of nightmares, but most have lost sight of what once would have been deemed so.
The afternoon saw a swing lower on a spooky trade related headline. For now, there is no real sign that phase'1 will be signed off before year end. For now, the market remains largely in denial, not that any of it (on a $ basis) matters to the broader economy anyway.
Rate cut four?
In recent days I've been increasingly dubious about a fourth rate cut.
Implications: no rate cut will lean bearish the precious metals and related miners. It will lean bullish equities, especially the financials.
To be clear though, another 1-2 rate cuts can be expected in 2020, along with further QE. In addition to ongoing T-bill and monstrous overnight REPO funding, I'd expect T-bond buying to commence before the Nov'2020 election.
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Goodnight from London
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