Cheer Up, Mr. Market…
Alex Moschina|August 14, 2024
What are we going to do with you, Mr. Market?
For more than a year, you’ve made it clear that you want rates to come down… and you want them to come down NOW.
And finally, after months and months of speculation that the Fed is ready to make the big move…
It’s looking more likely than ever that we’re going to get that long-awaited rate cut.
And what do you do?
PRACTICALLY NOTHING.
The July CPI numbers confirmed the Fed is close to winning its war on inflation.
Consumer prices rose 0.2%… just as analysts were expecting.
Overall inflation came in below 3% for the first time since the spring of 2021.
A September rate cut is all but guaranteed.
And yet… Mr. Market… you sit idly by, seemingly unamused.
It could be that you’ve forgotten how to trust. “Fool me once, shame on you,” you say. “Fool me dozens of times? Shame on me.”
It’s true… the path to our first rate cut in 52 months hasn’t always been easy. But what else do you need to see?
Tomorrow’s unemployment figures, perhaps?
That’s fair.
As Shah pointed out in his Monday Takeaways, the strength of our labor market is the other half of the Fed’s rate equation.
And we did just see a historic VIX spike on the heels of weaker-than-expected jobs numbers.
All of a sudden, it sparked whispers of a recession.
But…
Those whispers quickly died down.
Now here we are… with inflation clearly cooling… on the precipice of a 25 or even 50 basis point rate cut.
Maybe you need to see it to believe it.
Or maybe you are taking Shah’s advice from Monday… and tempering your optimism.
As he put it:
I don’t think we’re out of the woods. I want to believe that this is a great buy the dip moment. Maybe some of you did. Good on you if you did. You’re in the right direction, so far so good.
But be safe out there because the worst may not be over, but I’m hoping it is.
Either way, Mr. Market, this morning’s CPI numbers were an encouraging sign of what’s to come.
Here’s hoping Thursday’s unemployment report puts a little more pep in your step.
Alex Moschina
Alex Moschina is the associate publisher of Manward Press. A gifted writer, editor and financial researcher, Alex’s career in publishing began more than a decade ago when he worked at one of the world’s leading providers of academic research and reference materials. Alex first cut his teeth in the realm of investing when he joined the team at White Cap Research in 2010. There he was charged with covering emerging market trends and investment opportunities. A stint as senior managing editor and editorial director at the prestigious Oxford Club followed. A frequent speaker at conferences and events, Alex has led educational workshops across the U.S. and Canada.
