Stock Market Update: Fed Has A Problem This Week

The Fed has a problem in their meeting on Wednesday. We told subscribers the market usually takes a couple of days to react to CPI. CPI reported its 3rd .3 month-to-month in a row on Thursday which is inflationary.

It's now been a couple of days and guess what, we have another inflation spike coming with oil on top of the delayed CPI reaction. Saudi Arabia was attacked which is likely sending oil prices higher.

That oil price spike and 3 .3 CPIs in a row have to bother the Fed ahead of their Wednesday decision. What's more they've pretty much previewed a rate cut is coming this week. Uh oh. Inflation is jumping and they have to be deer-in-headlights now with oil.

I think they end up cutting rates but they are going to have to tell the market to cancel future rate cuts. If they cancel this one markets are going to take a whack (that's a technical term).

We have calls upcoming with: FIVN, AMD, AMZN, DELL, TER, TTD, SPLK, NVDA, and TXN.
We just had meetings with: AAPL, A…

Market Update: Hong Kong Risk Building

Non-Farm payrolls continued their slowing trend seen all year. We previewed to subscribers that weekly jobless claims previewed a light NFP number.

Slowing isn't great for markets. Jobs are probably the most important economic indicator to market traders.

The Fed appeared to preview a rate cut in 10 days. The Street expects two cuts this year. We'll see what the Fed previews closer to the Fed meeting.

I did not like this.

Hong Kong's Carrie Lam said there would be no China troops just a few days ago. The tweet above however is more recently from China's state run media editor-in-chief. These are very strong words. Anything close to reality will not be good for markets.

I didn't like stock market action on Thursday. I thought markets should have ripped higher. Friday was nothing but I turned much less bullish on Thursday. Tech fundamentals are good but I think this Hong Kong issue is a building risk.

The above is taken from today's Portfolio & Trades Update…

Timely Citi Tech Stock Conference Starts Tomorrow

We'll be covering the Citi tech conference tomorrow. My take on tech is that generally it sounds like it's trying to bottom fundamentally, especially in the semiconductor space. That said there's too much fundamental headwind risk from the never-ending trade war.

The Hong Kong protests also add another major wrinkle in the US and China negotiating a deal. We did see that Carrie Lam of Hong Kong said that the Chinese government will not be sending in troops but we can never know. That sounds like a positive that maybe they are warming to a trade deal. Using force would likely end trade talks. Holding off troops means they may actually want a deal.

I've been under the assumption though that China would rather wait to see who's president in 2020-2021 and string along current talks with no resolution. The longer that happens, that stringing along, the more the economy can slow which risks earnings and stocks.

We'll be listening at the Citi Tech conference for signs…

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