What should we think?
(if Klopp had been at press conference yesterday)
The market was looking for a cut. It was also looking for more cuts to come fast and furious. Powell did not deliver. It felt like it was painful to cut. Two of his colleagues didn’t agree and said there was no need for a cut.
Where do we go from here?
- USD seems strong and is challenging technical levels that open for a bigger move higher if the Fed doesn’t walk things back the next few days.
- Equities, always optimistic, will find a way to focus on the cut, and try to maintain current level. Some sectors look challenged (semi, health, banks).
- Gold is testing the $1400 level and we think it is a buy for a longer term trade, strong USD will hamper upside.
- Oil seems to be backing off but destined to range until we get more news on global demand, or some sort of event.