Ticonderoga Securities Market Strategy Reflections Morning Note
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Ticonderoga Securities Morning Note by John Stoltzfus
Market Strategy Reflections
We can’t help but feel that the recent haircut stocks have taken in the last two days is more due to profit-taking from the latest rally-mode move that took stocks higher from the end of August until Tuesday of this week than from reaction to the Fed’s FOMC decision and statement.
After all, the deceleration in the pace of the recovery reflected in recent economic data hasn’t exactly been a surprise to anyone active in the marketplace.
In fact, the Fed has for months now telegraphed repeatedly to the market its commitment to ride shotgun on the economic recovery. The Fed has given no indication that we know of for investors to think that the Fed is about to abandon its considerable investment in the current economic recovery.
That said, we expect the present downdraft to continue for at least as long as it takes for the next positive morsel of positive economic data to cross the tape. Beyond that, look for any and all jobs proposals coming to the fore ahead of elections in November to offer upside fodder for the market.
Disappointment in today’s initial jobless claims numbers that exceeded expectations by around 15,000 is likely to add to the negativity that's been dogging the market of late. Upward revisions to the prior week’s number will also likely add further pressure stateside this morning.
A Shot Across the Bow
Today, the financial press is giving space to the Republicans’ “Pledge to America” campaign just announced as members of the “grand old party” seek to regain control of the House of Representatives in the election this November. The campaign, announced today in a final draft of a 21-page document referenced in today’s FT, focuses on promises to make job creation a priority along pro-business lines. Such rhetoric is likely to provide some support to the markets and much more once rhetoric morphs into actionable plans for consideration. Stay tuned.
Commodities
Oil traded under $74 bbl earlier on concerns around an unexpected increase in U.S. inventories.
Gold prices edged higher near record levels on the metal’s attraction as an alternative currency and on a general feeling of uncertainty around the economy.
Copper rose to a five month high as inventories per Bloomberg data were set to decline for a 31st week straight as the economic recovery takes hold.
Market Strategy Reflections
We can’t help but feel that the recent haircut stocks have taken in the last two days is more due to profit-taking from the latest rally-mode move that took stocks higher from the end of August until Tuesday of this week than from reaction to the Fed’s FOMC decision and statement.
After all, the deceleration in the pace of the recovery reflected in recent economic data hasn’t exactly been a surprise to anyone active in the marketplace.
In fact, the Fed has for months now telegraphed repeatedly to the market its commitment to ride shotgun on the economic recovery. The Fed has given no indication that we know of for investors to think that the Fed is about to abandon its considerable investment in the current economic recovery.
That said, we expect the present downdraft to continue for at least as long as it takes for the next positive morsel of positive economic data to cross the tape. Beyond that, look for any and all jobs proposals coming to the fore ahead of elections in November to offer upside fodder for the market.
Disappointment in today’s initial jobless claims numbers that exceeded expectations by around 15,000 is likely to add to the negativity that's been dogging the market of late. Upward revisions to the prior week’s number will also likely add further pressure stateside this morning.
A Shot Across the Bow
Today, the financial press is giving space to the Republicans’ “Pledge to America” campaign just announced as members of the “grand old party” seek to regain control of the House of Representatives in the election this November. The campaign, announced today in a final draft of a 21-page document referenced in today’s FT, focuses on promises to make job creation a priority along pro-business lines. Such rhetoric is likely to provide some support to the markets and much more once rhetoric morphs into actionable plans for consideration. Stay tuned.
Commodities
Oil traded under $74 bbl earlier on concerns around an unexpected increase in U.S. inventories.
Gold prices edged higher near record levels on the metal’s attraction as an alternative currency and on a general feeling of uncertainty around the economy.
Copper rose to a five month high as inventories per Bloomberg data were set to decline for a 31st week straight as the economic recovery takes hold.
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