E Market Briefing For Thursday, August 22

The FOMC Minutes focused more on the economy as 'mid-cycle adjustments'.  

While that really shouldn't particularly comfort the uber-doves pressing the Fed for even-lower rates (you know my views about how that can become more or less counterproductive, and even contribute to the building bond bubble)... despite that the market held-onto gains as best able (going into the final hour). 

Anxiety is mounting while the S&P persists swinging within the relatively high level trading range I've indicated as 'healthy' because it's shy of really surprising folks by moving to all-time highs 'if' things fall-in-line just right; at the same time there is trading space (maneuvering room) between a bullish breakout and a bearish breakdown; identified basically as the August lows.

Now this is not just a broken record repetitive series of sessions. It's what I have described as a purposeful poising of the S&P above the triple lows of two prior weeks, as well as in-proximity for a thrust higher should favorable events justify. That's the kind of roller-coaster that is pending resolution; but mostly impacts the FAANG+ stocks that are the heaviest Index influencers, given that so much of the broader market is either neutral or corrected. 

As I mentioned before the week began, it would get choppier, and that's not to say we can't have more significant intervening volatility as soon as later in this week for that matter (depending on the FOMC Minutes tomorrow); and then G7 and so on. Thereafter the market focuses on the China telephone call to see 'if' the sides decide to then have another negotiating session, this time in Washington DC. 

Meanwhile the President reflects anxiety too; suggesting to reporters late on Tuesday, that we're nowhere a recession; then listing a number of ways his Administration could move to basically reinforce the economic conditions; if necessary it sounded like. He referred to 'mulling over' payroll tax cuts again (a comment heard then denied a day earlier); and Indexing as well as a few other approaches that he believes can help the Nation avoid a recession.  

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Carol W 11 months ago Contributor's comment

good thoughts. caution is warranted. sitting on my hands for now.