Today’s Log Entry

9/16/19 Monday

Before the weekend attack on Saudi oil production I had odds at better than 50/50 that the Fed would sound a hawkish tone, while cutting 25 bps; upsetting equity markets, gold (currently trading on prospects for lower-yields, as opposed to Armageddon) and bonds in the process. However, given the palpable geopolitical uncertainty the weekend wrought, my best guess, as I type, is that the fed will tilt dovish, while still cutting 25 bps; which could very well spark a notable rally in stocks.

The fact that stocks are trading lower today suggests that I’m either wrong in my near-term bullish assessment, or the market is just slow. Or, the fact that stocks really aren’t — under the circumstances — off all that much may suggest that I’m right, and that traders are just cautious in case another surprise (attack maybe) occurs between now and the Fed meeting.

Bottom line: Stocks are trading entirely on the prospects for stimulus at the moment, not on fundamentals (which are very suspect here). Not a market to fool with (unhedged, or undiversified) if you’re a thoughtful long-term investor…

Share:
Share on linkedin
Share on facebook
Share on twitter
Share on email
Share on pinterest

Recieve Between the Lines Posts to your Inbox

Sign up for lorem ipsum delores sin.

We care about the protection of your data. Read our Privacy Policy.