Last week I talked about expectations of a Fed rate cut, a strong unemployment rate, and trade talks with China. All three came in as expected, but then the “Yeah but” factor kicked in. After the Fed rate cut announcement, Chairman Powell’s “Yeah but” dovish comments raised concerns over future cuts, causing a Wednesday afternoon sell off. By mid-day Thursday, markets had recovered and the Dow was up 300 points. Then the “Yeah but” trade tariff increase comments kicked in causing a 600 point Dow swing to the downside by Thursday’s close. Before the markets opened on Friday, the jobs and unemployment data were strong. However, “Yeah but” concerns were again raised about future Fed rate cuts and the Dow sold off until late morning. However, the Dow and markets then reversed direction to the upside, and the S&P 500 closed the week at 2930. Next week’s economic data is pretty light with only the monthly Producer Price Index on Friday. As such, we have the possibility of a return to bullishness as the markets consolidate and/or recoup this week’s losses just like they did on Thursday morning and Friday afternoon. That said, for TSP TIPS we recommend no reallocation changes.
Last week I talked about expectations of a Fed rate cut, a strong unemployment rate, and trade talks with China. All three came in as expected, but then the “Yeah but” factor kicked in. After the Fed rate cut announcement, Chairman Powell’s “Yeah but” dovish comments raised concerns over future cuts, causing a Wednesday afternoon sell off. By mid-day Thursday, markets had recovered and the Dow was up 300 points. Then the “Yeah but” trade tariff increase comments kicked in causing a 600 point Dow swing to the downside by Thursday’s close. Before the markets opened on Friday, the jobs and unemployment data were strong. However, “Yeah but” concerns were again raised about future Fed rate cuts and the Dow sold off until late morning. However, the Dow and markets then reversed direction to the upside, and the S&P 500 closed the week at 2930. Next week’s economic data is pretty light with only the monthly Producer Price Index on Friday. As such, we have the possibility of a return to bullishness as the markets consolidate and/or recoup this week’s losses just like they did on Thursday morning and Friday afternoon. That said, for TSP TIPS we recommend no reallocation changes.