Pivot to 1%? They'll sound dovish, but where the rubber meets the road, aside from stuff like consumer electronics and excess inventory markdowns on fashion and summer accessories, and of course housing if you leave out rentals, prices are still flat/rising. Distillates other than gasoline have to come down and stay down before the average Joe see's any relief at WMT on the stuff they buy as essentials. The Fed can't control that, nor can they control the weather. And so far, the NE has been pretty cold, which puts added strain on the already tight inventories.
Went short YM and ES. Fed is not going to be soft, otherwise they would lost control again. Powell doesn’t like market going up, that makes his job harder.
I think basic human psychology will prevail, just like in the past. When shit hits the fan, they will have no option but to pivot, it’s common sense.
Not yet, unemployment is still low, CPI is still high. Most importantly, corporate earnings are not supportive for high PE. Mike Wilson sees Q1/23 bottom around 3700, so MS thinks will have to pull back a lot. 50bps successively is the best. Powell needs a strong dollar.
Bidless market / trend day. There's an open gap from last week @ 3958. I'm sure we'll close it by the Close.