August 23, 2024
Markets:
Stock futures rose Friday as traders await an all-important policy speech from Fed Chair Jerome Powell for any guidance on future rate cuts.
The Fed chairman, set to speak at 10 a.m. ET from the central bank’s annual conclave in Jackson Hole, Wyoming, is expected to signal it’s appropriate for the central bank to begin lowering interest rates soon, with limited clues about the magnitude and frequency of the reductions.
Markets are betting on a quarter percentage point cut at the Sept. meeting, and leaving open about a 1-in-4 chance for a half percentage point reduction, according to the CME Group’s FedWatch. Minutes from the July session showed a “vast majority” of members in favor of a September cut.
Stocks were pressured on Thursday by a surge in Treasury yields in the run-up to the Jackson Hole speech. The S&P 500 fell 0.9%, while the tech-heavy Nasdaq Composite declined 1.7%, suffering its worst day since Aug. 5. The blue-chip Dow lost 177 points.
Portfolio:
Today is all about Powell! If his comments are favorable, the market could rally. If not, key technical levels and trend lines will come into play. Stay patient regardless of the outcome. Let the market digest his remarks, and avoid getting caught in the volatility. Remember, it's Friday, so there's no need to force trades if the setup isn’t clear. Monday often provides better opportunities after major events like today’s.
Yesterday's market swings, although challenging, might have been beneficial in the long run. A quick drop is often followed by a stronger rebound for the bulls, as opposed to a slow decline, which is typically less healthy. Thursday’s price action could set the stage for a monster bounce back, especially since we didn’t want the market to be at its highs going into today. Now, with the pullback, the setup is more favorable for the bulls. We just need to wait for Powell's speech.
No changes are necessary for our current holdings in TSLL, ZETA, SIRI, NIO, ASTS, and MARA. Let’s stay ready and have a great session!