E Market Briefing For Thursday, Aug. 2

As I mentioned last week; we'd already prepared investors for what's most likely on-tap next; and how to handle it (proportionality and realignment in certain sectors and a couple stocks we think were and are attractive while rotating-out at least partially from the overextended narrow leadership). 

Essentially QT alone has never been a welcoming incentive to buy stocks; that's why I recently shared a chart 'correlating' periods of QE and QT, and the effect that had on the S&P. While one can argue alternatives to what's increasingly the 'off-loading' at the Fed; I won't embrace that 'this time it is different' approach; especially not at these extended levels or seasonality. 

In-sum: the Fed adheres to its policy directives; and that's enough to give us a 10-year and 30-year both holding above a 3 handle; and concern as regards our emphasis on QT being a restraint; that few are respecting. It's probably a restraint on the S&P already; though after the market breaks, I am sure pundits will blame it on the very monetary policy they marginalize.  

  

Also; you have unknown risks to an cavalcade of politics surrounding the President; who seems visibly shaken by the ongoing investigations. So far not much of this 'noise' has impacted markets; but that could change too.

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Gene Inger 2 years ago Author's comment

P.S. This week ONLY prior to my departure to Brussels and Paris next week; all NEW Daily Briefing subscribers will be able to renew the ensuing Quarter and be refunded 100%. That means half price for the next six months; both due to reduced frequency of reports during my travels for 4 weeks, and during the most crucial time for this market. Visit www.ingerletter.com/subscribe to join us. This offer is this week ONLY and will not be repeated.

Gene Inger 2 years ago Author's comment

Gene is humble and proud to be the only guy not shorting and believing the S&P would go to the moon 'if' Trump won back in 2016. Now a bit more concerned but only from a cyclical not secular basis.