The opinions expressed below are my own and do not necessarily represent those of Visdom Investment Group, LLC.
Fresh start.
Overseas equity markets rallied nicely across the board and S&P 500 futures traded up in sympathy. Futures implied about +35 points on the index at 8 AM. The index opened about +35 but gave it all back by 10:30 AM. The index wandered around flat for the bulk of the day and rallied small late. The yield curve steepened again and capital flow normalized, printing 100% today.
We’re back to business today. The Mag 7 didn’t lead the charge. Energy, industrials, materials, and utilities led the charge today. That’s different. Investors went dip-buying in different waters. Maybe they want to see a bigger dip before they go chasing the old vanguard? If that’s the case, a broadening out of the bull market is a technically healthy development. That could lend weight to the narrative of a bull market in mid-cycle. We will keep watch on leadership for a while.
The Treasury market continues to steepen. That hasn’t spooked any markets yet but if it continues, *some* markets are going to squawk and I wonder how bad it might be. The next few inflation prints have to be cool and the Fed is going to have to do some serious convincing for the long end of the curve to come in. The FOMC decision is late Jan, the 28th, and we’re only going to get a month’s worth of inflation prints along the way. I wonder if the long end will make up its mind in January or if it will take multiple months.
Guess what has snuck up on us? Earnings season.
The first big banks start reporting on the 13th. There has been no chatter or hype about earnings season yet. Are we about to see some ramp up? Last earnings season was surprisingly hype-free. If this season develops some heat, I think investors will buy the sizzle and drive prices up considerably.
There’s a lot around the corner and the month should be full of catalysts. Right now, those anticipated events look friendly to the bulls. Here we go.
Have a great weekend, Happy New Year, see you Monday.
-Mike
Visdom Market Commentary
IMPORTANT INFORMATION
This is general educational information and market commentary and is intended for informational purposes only and is not intended as an offer or solicitation for the purchase or sale of any financial instrument or as an official confirmation of any transaction.
All market and economic data herein is as of the date hereof and sourced from Bloomberg unless otherwise stated. The information is subject to change without notice and we have no obligation to update you.
This general market commentary is intended for informational purposes only and is not intended as an offer or solicitation for the purchase or sale of any financial instrument or as an official confirmation of any transaction. The views and opinions expressed constitute the author(s) judgment based on current market conditions, are subject to change without notice, and may differ from those expressed by other employees of Visdom Investment Group LLC ("Visdom") and Visdom. Past performance and any forward-looking statements are not guarantees of future results. It is not possible to invest directly in an index.
We believe the information contained in this material to be reliable and have sought to take reasonable care in its preparation; however, we do not represent or warrant its accuracy, reliability or completeness, or accept any liability for any loss or damage (whether direct or indirect) arising out of the use of all or any part of this material. Any securities referenced are shown for illustrative purposes only, and are not intended as a recommendation or endorsement by Visdom or by the author(s) in this context. The information presented is not intended to be making value judgments on the preferred outcome of any government decision. This information does not constitute Visdom research, nor should it be considered a recommendation of a particular investment strategy or an offer or solicitation for the purchase or sale of any financial instrument. Investing involves market risk, including the possible loss of principal. You should speak to your financial advisor before making any investment decisions. Visdom and its affiliates do not provide legal, tax or account advice so you should seek professional guidance if you have questions.
