The basic argument is that the threat of a possible confluence of easing central banks and simultaneous Dovish trade rhetoric leading to a breakout in the equities market would force a performance chasing FOMO bid among money managers into year end.
But part of that thesis was that it would have a similar impact on upstream supply chain managers, forcing the unleashing of pent-up, inventory-to-sales chasing activity that would provide the economic data boost to justify that breakout as trade agreements got signed.
Now, we are seeing the latter of those ideas perhaps fading even though the former continues to ramp stock prices.
Retail sales showed a still solid consumer, but we have seen fading action in rates and commodities in the past week and Fed’s Kaplan was out Friday am with the message that his team shows CAPEX spending basically still on hold. Industrial production was light, and Empire missed.
So, up go stocks.
S&P 500 Continuous Contract Futures (ES#); ETF: SPY
WTI Crude Oil Continuous Contract Futures (CL#); ETF: USO
US 10-yr T-Note Yield ($TNX); ETF: IEF, TLT
Copper Continuous Contract Futures (HG#); ETF: JJC
Have a terrific weekend.