THE WEEKLY TOP 10
Table of Contents:
1) Fed tightening might not hurt the economy much, but it WILL hurt the stock market (further).
2) The Fed cares MUCH more about the credit markets than the stock market.
3) Trying to explain every short-term moves with fundamental reasoning is a big mistake.
4) Very, very little stress showing up in the financial system thus far. (That’s bearish for stocks!)
5) The dollar is on the brink of a change in trend.
5a) Can the EEM emerging markets ETF breakout to the upside soon?
6) 10-year yield testing key resistance…Banks getting quite overbought near-term.
7) HD is sending up a warning signal for the homebuilders.
8) Are inflation concerns causing consumers to pull in their horns?
9) Updates on the charts of the S&P 500, the Nasdaq Composite and the Russell 2000.
10) Summary of our current stance.
1) As he frequently does, Jamie Dimon made a VERY important comment last week…when he said that the economy can handle the Fed’s new tightening cycle. He very well could be correct. Although the Fed’s new tightening policy should weaken the economy somewhat, there is a decent chance that they can tighten without slowing down the economy in a substantial way. The problem is that Mr. Dimon’s comments are actually a good reason to be bearish on the stock market (even if you’re not bearish on the economy).
This past week, Jamie Dimon reiterated his positive stance on the U.S. economy…and took it one step further by saying that thinks the Fed’s new (more aggressive) tightening policy will not have a major negative impact on the economy. The fact that such a well-respected executive thinks the economy will remain strong despite the Fed’s big change in policy is certainly positive news, BUT it ...