Good Evening:

The market had a strong week and Consumer Discretionary and Technology led the gains.  However, a negative catalyst in the form of exceptionally strong jobs numbers proved an obstacle for the rally. As economic data has been slowing in some areas, speculation had been mounting that a dovish pivot for the Fed might materialize sooner than markets were expecting. The number this morning makes that outcome less likely. This gives evidence to support the hawkish narrative that underlying economic strength should be able to sufficiently absorb the Fed rate hikes without causing a major recession or threatening financial stability. Remember Bullard, the FOMC’s most hawkish voice, has been saying he thinks the US can avoid recession despite his more headline-grabbing comments on the need for aggressive tightening.

Many investors were also focused on rising US-China tensions around Nancy Pelosi’s trip to Taiwan. The Chinese are conducting choreographed outrage and saber rattling, but for now an outright conflagration has been avoided. They did conduct some provocative actions, but it’s unlikely to get much worse from here in the immediate term.  Geopolitical risks have typically been able to be shrugged off by the market in the past decades. However, ...

Unlock this article with a FREE 30-Day Trial!

An FSI Pro, or FSI Macro subscription is required in order to access this content.

*Free trial available only on a monthly plan

Disclosures (show)

Get invaluable analysis of the market and stocks. Cancel at any time. Start Free Trial

Articles Read 2/2

🎁 Unlock 1 extra article by joining our Community!

You’ve reached your limit of 2 free monthly articles. Please enter your email to unlock 1 more articles.

Already have an account? Sign In

Don't Miss Out
First Month Free