Why is the market up so much today?

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dan_s
Posts: 34465
Joined: Fri Apr 23, 2010 8:22 am

Why is the market up so much today?

Post by dan_s »

One day is not a trend, but today's move on the first day of Q4 should tell us something.

From an EPG member that is much smarter than I am:

"The yield on the 12-month Fed Funds future is off again today and stands at 4.32%, down 48 bps from its peak a week ago. So, nearly two rate hikes have been priced out in the past week. That's good … this is the bond market doing the Fed's thinking for it: telling the FOMC where it needs to go (and where it shouldn't go)."
"The driver for this latest move was the September PMI manufacturing index, which came in at 50.9. You can see on the chart that we seem to be re-living the slowdown experiences of 2015 and 2018 -- both of which were accompanied by a tight Fed (which ultimately acquiesced, leading to equity rallies)."


There are at least ten more stats that are telling the Fed they can slow down on the interest rate hikes.

The US Dollar Index is down again, which is bullish for oil prices.

There is a lot more upside for our model portfolio companies. The Sweet 16 is still trading at less than half of my Fair Value Estimates.
Dan Steffens
Energy Prospectus Group
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