As you most likely know, last Friday’s strong jobs report – which showed 224,000 jobs created in June – has caused a bit of unease across the market. With investors now salivating over the prospect of a rate cut, robust economic data has come to be viewed with disdain. After all, who wants a strong economy when we can have asset-price juicing stimulus instead?
Article Category: Inflation
We’re going to mix things up this week and begin our discussion with gold, which has finally broken out to the upside from a multi-year consolidation pattern. As you can see in the weekly chart below, gold has climbed above long-term resistance near 1375, and completed a bullish breakout of its ascending triangle pattern.
Imagine you’re huddled down in a bunker, with the enemy approaching, and you only have nine bullets left. Do you fire a preemptive shot or two, hoping it will deter the enemy? Or do you save those bullets and wait patiently until you’re sure an attack is imminent? That’s the situation the Federal Reserve is facing right now.
Markets are rebounding today after yesterday’s precipitous fall, in which the S&P 500 and Dow Jones Industrials both experienced their worst day in four months. But make no mistake – the short-term trend remains down.
It’s been a busy week so let’s jump right in. We’ll begin today with a brief look at where markets stand, get caught up to speed on the earnings front, and then examine recent trends in the latest economic data.