$DIA, $SPY, $SOX, $QQQ, $RUTX, $USD, $XAU, $GLD, $VXX
Total CPI increased 0.1%, as expected, as did core CPI, which excludes food and energy prices.
The monthly changes left the Y-Y readings at 1.8% and 2.0%, respectively, versus 2.0% and 2.1% for the 12 months ending in April.
The Key takeaway from the report is that consumer inflation pressures remain muted, which in turn is going to reinforce the market’s inflated expectations for the Fed to cut the target range for the fed funds rate sooner rather than later.
Billionaire macro trader Paul Tudor Jones, 64 anni, said investors should buy stocks on the likelihood of new market highs and an interest rate cut.
“We should be long stocks right now,” he said in an interview Wednesday.
President Trump’s tariff battle with China boosts the chances of a Federal Reserve reduction, setting the stage for the strategy. The trade is part of a standard playbook he calls “1st rate cut 101.” That includes being long rates, gold and “at some point short the USD,” Mr. Jones said Tuesday in an interview.
Gold is his favorite pick in the next 12 to 24 months. If it hits 1,400 oz, it will quickly move to 1,700, he said. It now trades at $1,336.55.
Mr. Jones said the Fed is “probably on the cusp of the 1st rate cut after a long hiking cycle.”
Like many traders, he is gearing up for an aggressive but short rate-lowering cycle.
Mr. Jones runs Tudor Investment Corp., last June that he expected rates to climb “significantly” by the end of Y 2018. The Fed went on to hike the federal funds rate 3X by year-end, each time by 25 bpts.
“I did not think we’d have a 1st cut in 2019,” he aid ahead of an event Wednesday in New York sponsored by his non-profit organization JUST Capital. “I do not think we would have had that had we not gotten into this tariff battle, and so it has accelerated everything.”
Wednesday, the major US stock market indexes finished at: DJIA-43.68 at 26004.83, NAS Comp -29.85 at 7792.70, S&P 500 -5.88 at 2879.84
Volume: Trade on the NYSE was light at 677-M/shares exchanged.
- NAS Comp +17.4% YTD
- S&P 500 +14.8% YTD
- Russell 2000 +12.7% YTD
- DJIA +11.5% YTD
HeffX-LTN’s overall technical outlook for the major US stock market indexes in Bullish in here.