Fed Governor Bullard’s comments in the past have been market movers but it’s too soon to say if Friday’s late comments would do the same.
Then he stated, “Markets appear ready for interest rate hikes since a rate hike has been priced in”.
Really? This was the message early Tuesday until a poll suggesting a BREXIT was likely. This unsettled investors and stocks fell modestly.
Economic data was mixed and it depends how on your view to reach your conclusion.
Personal Income rose to 0.4% but Personal Spending rose 1%. Some may find this good while others won’t like the increased debt. The Case-Shiller HPI jumped to 0.9% vs prior 0.7% which is two months of back to back sharp increases. The Chicago PMI fell into contraction at 49.3 vs 50.4—a very bad reading. Consumer Confidence fell to 92.6 vs prior 94.4.
The Dallas Fed Mfg Survey dropped once again to a recessionary -20.8 vs prior -13.9. Lastly, State Street Investor Confidence fell to 106.64 vs prior 108.60.
Taken together, I don’t see this as showing much economic progress. Oh wait—the data wasn’t positive enough to cause an interest rate hike was it?
Below is the heat map from Finviz reflecting those ETF market sectors moving higher (green) and falling (red). Dependent on the day (green) may mean leveraged inverse or leveraged short (red).
Volume higher as investors return from holiday and breadth overall was positive.
Chart Of The Day
Given the light volume sharp advance from last week, today’s two-way action was impressive holding things together.
But, the overall crummy economic data doesn’t promise an increase in interest rates.
That said nothing should surprise investors going forward.
Let’s see what happens.
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