In other words, gambler mania and Fedspeak b.s. aside, the Fed just admitted the cycle is over.
Any questions?
"...futures markets are pricing in no further tightening and in fact are noting a small chance for a rate cut over the next year"
No surprise, the Fed has not even the slightest clue what is going on in the economy because the shutdown has not only distorted first quarter GDP, but it has also delayed and distorted myriad government-produced economic reports. Data that is normally already lagged by weeks and months will now be lagged by an entire quarter. Which means this period of mass confusion will persist well into the second quarter. All of which comes at a "bad time" to say the least since economic data were weakening going into the shutdown already. Hence, the Fed threw the casino a bone by saying that the case for further rate hikes has "weakened" even though the "economy is still strong".
Bond traders are not buying it:
Bond traders are not buying it:
What Wall Street was especially excited about was new "language" regarding the balance sheet, even though no specifics whatsoever were offered. Gamblers were told that the Fed is looking at ending balance sheet reduction sooner than previously expected. Yet gave no indication of what that means. Steve Liesman gets full credit for exploring that all-important gambling topic to the maximum extent possible. It was the Jedi Mind Trick on level 11.
The good news for gamblers is that if we get another -20% drop in the S&P, the Fed may begin to start to think about laying out a plan to curtail liquidity reduction. And then communicate that at their next meeting.
Where it gets interesting is that the dollar imploded on news that further global interest rate divergence is no longer in the offing. Just in time to repeat carry trade RISK OFF implosion from last year:
Bueller?
Utilities
On the subject of extreme denial, the massively over-crowded hedge fund momentum trade tagged the 200 day for the fourth time in four months, as we learned that Apple revenue is now declining year over year.
The fifth lower high including the September peak:
Getting back to the subject of trade talks, gamblers are just beginning to figure out that if China makes major concessions on trade those will merely hasten the implosion of their economy. If they don't make major concessions that will draw out the trade war and further delay business investment.
Either way, there IS no upside from this trade war.
"From the moment Wisconsin struck a deal to pay Foxconn more than $4 billion in taxpayer subsidies to build a plant in the Badger State, critics decried the plan as a total scam that had Donald Trump and Paul Ryan’s fingerprints all over it. And they weren’t wrong!"
"That's not a scam, THIS is a scam"
Speaking of "strong earnings":
"EPS: 17 cents per share vs. 22 cents expected in an analyst survey"
"Look, it's the best rally since the last implosion"
