Control Panel: Noise

I post a Control Panel only once a week to try to improve the signal-to-noise ratio. The past few weeks have been noise that was caused by the markets reacting to the economic data showing that the Fed is likely to maintain the fed funds rate at its current level for months ahead as expected.

The underlying trends of higher stocks and higher long-term yields are still holding despite the noise.

The Fear & Greed Index is neutral.

The Atlanta Fed’s GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2024 was 4.2 percent on May 8. That’s very high growth. The Cleveland Fed’s Inflation Nowcasting shows Quarterly annualized percent change of Core CPI and Core PCE inflation both over 3%. The options market shows little chance that the fed funds rate will be cut before September.

The markets have assimilated this and are coming back to normal.

The METAR for next week is sunny.