Revenge of Jamie Dimon…
This morning we are seeing the backlash against the hotter economic numbers generated this week. CNBC suggested that it is the Revenge of Jamie Dimon as a response to his “the sky is falling spouts” have been ignored by the markets. First quarter GDP estimate was raised yesterday to 2.4% and we will be getting another update today reflecting housing numbers.
I will be providing post updates during the day today as we see the backlash evolve.
From a trading standpoint, this is a healthy backoff of the S&P, we may get to see buy areas in the low 4000’s maybe 4025 to 4050. Ammo is need for an explosive shot through the 4350 S&P resistance area. Other parts of the market like the RUT that track the grass-roots stocks have been doing better than the S&P.
My extensive fundamental research over the years has outlined four factors that seem to drive stock market prices;
- First, is stimulus by Fed and Fiscal programs.
- Second, is core economic drivers.
- Third, is low interest rates.
- Fourth, is confirmation of the core economic drivers in the form of negative precious metal prices.
The mix of the above at this moment is:
- The core economic driver is the switch to alternative energy sources to battle CO2 emissions. This includes the buildout of EV, Solar, building renovation, and the like.
- This driving economic force is a joint colaboration between individuals, municipalities, local, state, and federal governments with the Inflation Reduction Act being the pivot point.
- Low interest rates and Fed stimulus are gone, and that is what is perplexing the markets, they got so use to it during the artificial market era starting in 2011 and ending in 2022, eleven years of chaos.
- Precious metals seem to have hit a headwind this week due to higher interest rates and less need for depression protection. I would not be surprised to see this downside move to accelerate during the coming months.