Markets are up BIG on the heels of the first interest rate cut we’ve seen in four years after an aggressive rate-hiking cycle to combat inflation.
I would call this a bit of a delayed reaction after Wednesday’s 2 p.m. ET announcement and subsequent comments from Fed Chair Jerome Powell, which had my head spinning.
There was no real justification given for a 0.5% cut, no matter how hard he tried to spin it. And no one was buying it — the market included because it didn’t do hardly anything after the cut until this morning.
What we’re seeing today didn’t happen yesterday because not one institutional trader believed what he was saying.
To say he contradicted himself would be an understatement. He’s been telling us we need to think about lowering rates a quarter-point because the job market was in trouble.
But the fact is they didn’t need to do this rate cut, and he had no explanation for why they were going so big.
He said yesterday the job market was great.
We also know that inflation has barely gone down at all the past year, and the jobs reports have gotten worse.
But according to him, everything is great — aye yi yi…
We have a lot to talk about this morning, so I’ll cover all that, my daily hitlist of longs and shorts and more in this morning’s “Premarket Must Watch” video!
Roger Scott
Roger Scott Trading
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P.S. The Pieces Are Falling Into Place…
Inflation cooling… check.
Job market slowing… check.
Fed eyeing rate cuts… check and mate.
Sounds like a recipe for smooth sailing, right?
Wrong… DEAD WRONG…
Because when these factors align, we could be heading into the perfect storm…
A storm that’s wreaked havoc three times in the past 30 years.
During the dot-com implosion… the 2008 Financial Crisis… and the COVID meltdown.
Each time, investors saw billions in market cap vanish like a ship lost at sea.
But this time?
