ACTV - A Stock Market Exclusive: Emotions And Price Action

2024-06-15 07:16:12 ET

Summary

• The macro view is reality, while the short term is emotion-based, and they rarely align. Separate the two, in the short term - it's always price action.
• The economic data set that investors need to measure this economic backdrop, is filled with conflict and controversy.
• Mega-cap tech companies continue to drive earnings growth, business capex spending is increasing, and buybacks are back.
• It was another strange week, with the indices looking strong but many sectors showing weakness. We're seeing some moves in a few days that typically occur over months.

"An investor without investment objectives is like a traveler without a destination." - Ralph Seger

MY VIEW OF WALL STREET

The ECONOMY

Given the slower momentum in economic data and the fact that inflation has proved to be stickier than originally thought, talk of stagflation risks has entered the conversation. I've mentioned that it is too early to jump to that conclusion.

The 'stag' part of stagflation represents stagnating economic growth. While there are most certainly signs to suggest that economic momentum has slowed, it's far from certain that the economy is stagnating. Exhibit one is the latest estimate for Q2 GDP from the Atlanta Fed's GDPNow model . In its latest update, Q2 GDP forecasts are at 3.1%. That's almost twice the consensus forecast. While that 3.1% forecast is far from a guarantee, it would be hard to imagine GDP stagnating below 1 or 2%, given how high the current forecast is from the model....

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