I was looking for what caused that sudden reversal and couldn't find anything, so been wondering...
Last trading day before long Labor Day holiday means low volume and the machines can just bop the market as they wish.
only thing I’ve seen is Russia shutting down nord stream which is not great for Europe. And some knock on from nvda being told what it can and can’t do in China. That can escalate.
yeah but the nividia news was last night, so that wouldn't explain mid day reversal. This CNN Marketwatch news update confirms your thought about Russian pipeline halt.
The S&P 500 is on track to book its biggest blown lead since April as the broad-market index is down nearly 1% in the last hour of trading on Friday, as news of a prolonged halt of natural gas flows through a key Russian pipe...
But just fits a pattern of closing out positions before a long holiday weekend, esp. given that Fridays tend to turn downwards in general anyways.
Read an interesting article in NY Times yesterday i think it was that said the best way to navigate this gut wrenching moves is to do nothing. May be some real wisdom in that.
I'm looking forward to getting some volume back after labor day.
My current thesis is that the old inflation story was:
supply side crunch + economic growth = inflation.
now it feels like the supply side crunch is over and done with. so now it's just:
economic growth = inflation
And seems very unlikely to me that economic growth will be so strong that we need a 10 year over 3.5%. Which would be a fine and healthy rate and good for stocks.
One, how does employment play into this? Lots of demand, and maybe too much. Wages thereby increase to attract dwindling labor pool, which is inflationary.
And then what you note is an economic backdrop, on top of which we are prone to overlay how the Fed will react to it. Their propensity to raise rates, and to how high in the final analysis, is a very strong factor in how the markets are moving.
Really, there is the threat of recession, the actual chance we might go into a recession, and what the Fed is doing about (which could effect the likelihood of a recession). All of these bearing on the markets.
ja, the fed want more unemployed people, for sure. they don't want wages rising and rising beyond the world economy's ability to produce enough widgets to sell to rich Americans. Because that would drive widget prices up.
a nation at full employment while supply chains are still a bit messed up...is inflationary.
