Back In The Saddle

Always hard settling back in from vacation, with piles of research and emails to follow up on. But hey, I'm not complaining. As for the market, with all of its daily volatility last week, I was surprised to see that the S&P 500 finished the week with a +0.2% gain, while the Nasdaq was flat for the week, aided by some nice gains in biotech.

This morning the news is kind of light. The Fed's preferred inflation guage, the core PCE (personal consumption expenditures), came in at +0.3% (vs. +0.2% expected), while personal incomes and spending were above expectations.

Citi (C) said that it is shutting down the rest of its Tribeca hedge fund, and I'm wondering if this didn't add to last week's volatility. It sure did feel like there may have been some large liquidations at work.

Asian markets were lower overnight, and the dollar is mixed this morning. Oil is trading lower, below $125. I heard that the CRB commodities index had one of its worst months last month in decades. That should bode well for inflation expectations. The 10-year yield is flat at 3.94%.

The Fed meets tomorrow regarding its interest rate decision. Odds are that they will do nothing, so the market will take its cue from the ensuing statement and outlook. That could make for light trading today as investors take a wait and see approach.

The bounce from the July lows has certainly not been as strong as the bounce from the March lows, but the major indexes are still in good shape in terms of not making any lower lows since July 15th. I am still looking for more lift from this market as it further unwinds some of that pessimistic sentiment.