
Posted August 05, 2024
By Matt Insley
The Fed Screwed Up
Happy Monday! And welcome to the first installment of our supercharged election-centered content.
I had another issue in the can today…. But sometimes life comes at you fast.
If you haven’t checked out your mainstream financial news feed this morning, there’s one story that’s creeping to the forefront.
Dow futures are down 1,000. The tech-heavy Nasdaq has lost 5%.
And?
In futures trading this morning, the S&P 500’s down over 4%.
Obviously, the market’s responding to an economic picture that’s looking pretty grim right now…
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Your Rundown for Monday, August 5, 2024...
Rate Cut Coming… Right?
On Friday, the July job numbers revealed that unemployment has ticked up steadily for four months in a row — now at its highest level in three years.
Manufacturing just tanked to its lowest point since late last year.
And the VIX, Wall Street's go-to gauge for measuring expected market turbulence, just shot up to levels we haven't seen since October 2020.
For the past couple of years — interestingly — such negative economic news often had a positive effect on the market.
That’s because it increased the likelihood of the Fed cutting rates.
Now, with a September rate cut widely expected, that narrative has flipped.
So bad economic news is back to being, well, bad.
All that to say…
The Fed's way behind the curve.
We're careening towards a recession.
And that September 25 bps rate cut is too little, too late.
We’re sticking our necks out this morning: The Fed will make an emergency intermeeting rate cut of half a point, 50 bps.
There’s one precedent we could find: Going back to March 2020, during the early days of the Coronavirus.
That was the Fed’s signature move at the time; we expect nothing less today.
And we’ll likely then get a huge rally… but what comes after that?
Stay tuned… more on Wednesday… and once again, welcome to Election Insider!
Market Rundown for Monday, Aug. 5, 2024
S&P futures are down 4.30% to 5,135.
Oil futures — down 2% to $72.07 for a barrel of WTI.
Gold futures are down 2.40% to $2,410 per ounce.
Holy cow! Bitcoin is down 14% to $50K.
Send your comments and questions to, feedback@newsyoucanacton.com

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