Dow 40K Is Just the Start
Alex Moschina|May 18, 2024
Wait and see.
That’s Jerome Powell’s official stance – and the official stance of the U.S. Federal Reserve – regarding the mixed inflation numbers we discussed here on Wednesday.
“What [the numbers] told us is that we’ll need to be patient and let restrictive policy do its work.”
On the bright side for Wall Street and investors, Powell has said a rate hike is unlikely.
Which means the question isn’t whether rates will get cut. The question is when.
In the meantime… we wait.
Of course, waiting isn’t really Wall Street’s thing. And so, the markets have headed north this week on data that – while not all positive – has been more positive than negative.
It could very well mark the start of a second leg for this bull market, as Shah told Stuart Varney this week on Fox Business.
“Markets have figured out that the Fed will eventually cut rates no matter what inflation does,” Shah said. “But in the meantime, the story behind the story is that the economy is handling higher rates beautifully. We still have growth… nothing is broken… everything has been managing so far.”
Just 48 hours after Shah made those comments, the Dow topped 40,000 for the first time ever.
The past month has looked quite lovely for the longest running of the “big three” indexes. And to still be crushing benchmarks at 128 years old? Well…
If only we could all be so lucky.
And so, it’s “risk on” for investors.
Meme stocks like GameStop (GME) are back to soaring hundreds of percentage points over a matter of days – and then, in many cases, coming quickly back to Earth.
“That’s how good things have gotten,” Shah told us in his Monday takeaways. “Let’s hope it continues that way.”
Now that we’ve gotten those much-anticipated CPI and PPI numbers… plus Mr. Powell’s latest cautious but quasi-optimistic comments… it appears the good times just might stick around.
Which is all the more reason to stay up-to-date on our team’s latest trade ideas.
For example…
The topic may not be as sexy (or as volatile) as meme stocks but, nevertheless, we received some very nice responses to Shah’s latest Buy This, Not That centered on utilities.
And Alpesh focused Thursday’s edition of Dealmaker’s Diary on a clean energy pioneer that scores a 9 (that’s very good) on his proprietary GVI rating system.
Then there’s Robert’s much-discussed piece about the coming Artificial Superintelligence (ASI) token.
Crypto plus AI. It’s a match made in heaven.
We’ll have plenty more ideas for you next week.
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.
