Was the PCE data disinflationary? That‘s very much been the case – but did earnings become that much less attractive compared to yields over the trading day? For all the question marks still out there, I would argue that higher lows are still there in equities. I would also argue that we will first see rotations occur, and then some broadening out as the IWM seems to hint at regarding true(r) rate cut expectations, weeks to months ahead.Precious metals and oil moved in line with my expectations in the data release aftermath – and that counts for as much in the upcoming stock market path as the sectoral moves themselves.One more note on long bonds and Friday‘s TLT move – with the US running a 6% budget deficit and a 4% trade account deficit, Japan being the largest friendly foreign bondholder for over a year and floating policy normalization, and geopolitics playing out in finance, all of this may make many countries from the Global South think twice about holding Treasuries.That ultimately leaves the Fed the buyer of last-resort positions, herding domestic institutions into Treasuries. Hence, I consider the current appreciation of rate cut odds as missing this aspect and concentrating only on domestic economy performance, stagflation/recession worries, and soft landing engineering.Just consider the inflation data backing the Fed – the preferred core PCE year-over-year rate is at 2.6% vs. the projected 2.8% reading. This can‘t be overlooked.Are commodities falling apart here? No, they are in a range, just like bonds are. There is no rush to the exit door, and the Fed‘s stress tests didn’t seem to raise fears about the banking sector. Additionally, Bitcoin could move above the $58,000 mark, going back to the midpoint of its range just like oil did.Just focus on the truly important details.More By This Author:Core PCE Positioning Beyond SPYTight Range And Rising VolatilityNVDA Vs Bouncing For Real
