S&P 500 had a great day in line with predictions, offering plenty of intraday gains to clients. The sectoral and bond market picture has been risk-on, and Epire State manufacturing data showed that all the stagflation fears are premature. Forget not latest inflation readings reinvigorating the disinflationary trajectory, and the still baseline scenario of seeing the first rate cut in Sep.

Monday‘s S&P 500 and Nasdaq moves are all the more valuable since the manufacturing data of course led to rising odds of not cutting in Sep (to 40% now vs. 30% Friday), yet the bond market moved up following the opening bell too. This is more than the typically bullish Mondays in stocks or jitters regarding France – bond yields simply have trouble rising here.

I‘ll open up today‘s macro predictions – in spite of the weak UoM consumer sentiment data, I don‘t think retail sales are to disappoint. Core is to come at 0.3% while headline can manage the predicted 0.3% at least as well. That would not lead to retreating odds of rate cuts exactly.

Can that result in silver outperforming gold in the nearest future as per the below chart‘s indicated breakdown from the rising wedge? I think so.

Let‘s move right into the charts (all courtesy of www.stockcharts.com).
 

Copper

Copper still isn‘t acting convincingly, and bottom can‘t yet be declared to be in, not in the least. Commodities rely more on agrifoods and oil, and black gold is bound to consolidate yesterday‘s solid upswing. Volume is there, and the technical posture for oil has improved much on the daily – that indicates positive economic suprises ahead, and the conundrum then remains why copper isn‘t reacting as well. Hence my cautious tone about oil in spite of its latest technical improvements.

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