SP500: Good news...The Fed cut rates!....Bad news...US could be entering a recession!

 



The S&P 500 closed near its all-time high on Friday after the Fed cut rates by 50bps on Wednesday. The Fed's jumbo rate cut might have surprised some investors on Wall Street, per CNN. But coincidentally, three US Democrat senators, Warren, Whitehouse and Hickenlooper, sent a letter to J. Powell on Monday to urge the FOMC to cut even deeper, by 75 bps. The Fed's action has sent the 2Y treasury yield to dip below its 600-day EMA, meaning the US could be entering a recession or already be in a recession.

In the past 25 years, all three US recessions occurred after the 2Y treasury yield dropped below its 600-day EMA. Don't rush to sell everything just yet. If it is just a mild recession, it should have minimal impact on the financial markets so let's see how the Fed will react to economic and inflation data in the next few months.

This note contained herein is our opinion and should not be construed as a recommendation to buy or sell. Click here to view the latest update!


Comments

Post a Comment

Popular posts from this blog

TESLA INC. (NASDAQ:TSLA): A robotaxi war may be brewing in China

Image
Tesla cleared their first hurdles in China after the company received FSD approval from the Chinese government. Beware though, just days after Elon Musk confirmed Tesla's intent to unveil their robotaxi in August, one of China's largest ride-hailing companies, Didi Chuxing, announced a joint venture with Chinese EV maker GAC Aion to mass produce its own Level 4 robotaxi, per IOT World Today. Didi acquired Uber China in 2016 and has more than 80 million active users in China. The downtrend of Tesla stock remains intact. TSLA needs to break above the key resistance level at $182.33 soon, or else the stock could pull back to below its 50-day EMA. This note contained herein is our opinion and should not be construed as a recommendation to buy or sell. Click here to view the latest update!
Read more

BITCOIN (BTC/USD): Bitcoin stuck under trendline resistances at ~ 69k or the Nov'21 high

Image
Bitcoin is stuck under trendline resistances at ~ 69k, or the Nov'21 high. June's macro conditions could provide the next catalyst for bitcoin to make a breakout, per CoinDesk. Be aware, though, that a rejection from the trendline resistances could send bitcoin back down to retest the trendline support ~ 65k. This note contained herein is not and should not be construed as a recommendation to buy or sell. Click here to view the latest update!
Read more