First and foremost, we take pause to reflect on the most vital part of our human existence-the sanctity of life. The topic of money glares insignificantly compared to the tragedy in Las Vegas. I write tonight’s commentary with a heavy heart.
Over the weekend, the Daily covered the strong possibility that Yellen’s (and 5 others on the Federal Reserve) days are numbered. Because of that musing, watching the dollar and the 20-Year Treasury Bonds sat high on the priority agenda for Monday. Also on watch, after Yellen’s comments on the mystery of low inflation, we were particularly keen on how the rising dollar would impact commodities. Many existing Fed Governors weighed in today.
Kashkari, a dove, wrote that the Fed’s rate hikes are causing low inflation. Kaplan says that he sees a deficit funded tax cut causing a headwind for future economic growth. He also expressed concerned about the Federal Reserve retaining political autonomy. Marsh, a front-runner for Chairman, has stated the opposite. Kaplan further articulated that the Fed has room to hike but not as much as people think. It appears the stock market believes that the Fed will do right by it. Yesterday, in melt-up fashion, three indices roared to new all-time highs. Therefore, if the stock market roots for a dovish Fed that’s not so autonomous-doesn’t that also make commodities ready for a Rocky Mountain High?
Nasdaq 100 gained, yet with FANG stocks not as popular right now, it remains over $1.00 away from its all-time highs. Logically, with a market and many instruments at nosebleed levels, investors looks for value. However, many stocks have already taken off from their languishing bottoms.
The Russell 2000 closed last month over the channel I showed you repeatedly and delivered. Remember my focus on Biotechnology 2 weeks ago? Market needed specs to fuel it and it got it. What has yet to take off? Most commodities. The dollar did indeed gain. UUP, the ETF, cleared the 200-week moving average. That makes 24.30 pivotal.
