E Market Briefing For Friday, Aug. 23

Dovish expectations are increasingly being tempered by a few others joining our view that the last Fed cut was likely to occur; but not essential. The negative yield trend in Europe should emphasize the inability (at least nominal at best) of lower rates in an already low environment ineffective.  

While we have contended a sort of sluggish stagnation prevails, we have at the same time argued against more than corrections; and even allowed that the S&P might well make it into new high territory if a few things go right. At the same time, I do not embrace the frenetic (almost like panic) calls just a few analysts have called for in the near-term; but I am open for rally failures; given the sensitivity to a lot of things.  

Heading that list is the 'shuffle' from inverted to stabilizing yield curves, and how it creates a rolling debate (literally hour-to-hour) about recession or not. As you know, I believe the nuances of recession have been around for over a year; and that the official proclamation would be near the end (providing a couple worst-case global scenarios don't occur).  

Hence, 'if' we are so lucky (for entry of new monies) to evolve into a serious 'clocking' of the market into Fall's often-precarious time, it may become an attractive place to enter. The economic expectations are mixed depending which Fed-head or economist is speaking at Jackson Hole; while most now talk about 'risk to the downside' and less robust activity; which I believe just finally acknowledges what's been evolving since Spring of 2018; not merely this year. This is not about the President's tweets suggesting that U.S. rates should 'catch-down' with those of Germany for-instance; and we doubt that would help the U.S.; while rates here in Europe really need to reflect upon a series of reasons 'why' such desperate lowering efforts aren't working.  

  

So the suppression here is more focused on the global impacts; a factor that won't really be helped by a U.S. Fed cutting rates; and notably its not clearly conveyed by the Fed Presidents that 'us' catching-down with yet another series of cuts, likely won't be relevant; whereas their recovery would.  

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