E Market Briefing For Wednesday, Sept. 1

Nuances and ambiguities dominate the market and even geopolitical scene at the moment. The dovish tendencies, primarily real concerns COVID failing to peak as everyone wishes, resulting indirectly in a Fed trying to thread interest rate efforts through the obvious needle, to taper-away from excess stimulus, while not rocking boats too much with regard to economic stabilization.

We are going to have hotter inflation than the Fed would like, but growth does matter, because we concurrently have economic slowing if COVID rages more. And I'm concerned that COVID is never going to reach herd immunity this way, and never could, since even the vaccinated can carry the infection (one of the untruths given by officials previously claiming 'get the vaccine, live your life' as normal). This may be why the Vaccine heads of the FDA resigned today. Lies as both CDC or The White House usurped FDA's role without science-basis.

Now, POTUS day-after reflections on Afghanistan have no market meaning, but do relate to American credibility and fairly obvious miscalculations made. The negotiations by Trump and Biden were both done omitting the government of Afghanistan, which elevated the credibility of Taliban, and that backfired. President Trump was defiant in his remarks, and won't acknowledge what a lot of Americans, of both parties, believe was a poorly planned operation that did not include Bagram air base, although the 82nd Airborne and Marines did a great job within the confines restricting their ability to do more.

Executive summary:

  • Earnings, guidance and growth projections remain high, with interest rate expectations low, all of it contributing to analyst euphoria, not the market, as expressed by multi-month distribution masked by strong S&P / NDX (NDX).
  • It's indeed a reluctant market, with money managers crowding into momentum (momo) big-caps because of fear, not enthusiasm, even as underlying jitters aren't really there, nor should there be given how low so many stocks are.
  • Fed Chair Powell has done a masterful job of 'calming', he even touches on the 'known unknowns' to calm concern of how the Fed may act.
  • So there is stress but it's not a mystery to us why the bifurcation and the contrasts of valuations, plus there's a possibility of COVID-related slowing, the latter not because of shutdowns, but basically insufficient vaccines.
  • Two Senior Vaccine officials at FDA are stepping down, time for reforms perhaps, although they say it's due to others intruding on their 'space'.
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This is an excerpt from Gene Inger's Daily Briefing, which typically includes one or two videos as well as more charts and analyses. You can subscribe for  more

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