The index kissed the top of it's 6-month ascending triangle range. With the big news this week for investors being what will the fed do with rates we've seen investors eagerly assume that several more cuts are baked in this year and early next.
While more cuts are most certainly on the way, the real question is if the market is overly optimistic to the tune of being deaf toward any form of downside news. Will cuts lead to inflation? Will inflation cause a greater pinch on Main Street that eventually bleeds into Wall Street? Will Russia "accidentally" attack Poland? Will Trump decide to raise Tariffs on China, Mexico or Canada again? The likelihood of something in the geo-political spectrum happening is fairly high and with many leading equities already stretching their P/E to absurd heights (thank you AI) the potential upside from here is much lower than the potential downside, or at least the risk-off side.
All it takes is one article from a Mag7 insider to say that they are trimming GPU purchases by 50% to curtail costs to match revenues and this turkey is goosed.
While more cuts are most certainly on the way, the real question is if the market is overly optimistic to the tune of being deaf toward any form of downside news. Will cuts lead to inflation? Will inflation cause a greater pinch on Main Street that eventually bleeds into Wall Street? Will Russia "accidentally" attack Poland? Will Trump decide to raise Tariffs on China, Mexico or Canada again? The likelihood of something in the geo-political spectrum happening is fairly high and with many leading equities already stretching their P/E to absurd heights (thank you AI) the potential upside from here is much lower than the potential downside, or at least the risk-off side.
All it takes is one article from a Mag7 insider to say that they are trimming GPU purchases by 50% to curtail costs to match revenues and this turkey is goosed.
Ghi chú
Just thought this was an interesting anecdote. For the past 24 weeks the SPX futures have either been green OR they have set a higher high on the trend. So even when the S&P is down, it is still setting new highs...
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