Okay, let’s get this right. Last week, initial jobless claims dropped 16,000 to 233,000 versus the expected 240,000...and on that, the market had its BEST rally in two years? Is that what happened? It really is a tangled web we weave, notes Kenny Polcari, chief market strategist at SlateStone Wealth.
Bloomberg called it a “solid rebound,” which is laughable. What happened to the demand for an emergency Fed meeting to slash and burn rates from last Monday – because the US was circling the drain? Monday’s debacle was a dramatic move created because Japan raised rates the week before, causing the carry trade to implode
(Editor’s Note: Kenny Polcari is speaking at the 2024 MoneyShow Orlando, which runs Oct. 17-19. Click HERE to register)
That was a big NEGATIVE story that only created more negative stories, causing lots of losses for EVERYONE, when most of us had NOTHING to do with it. That then turned into the US is circling the drain and unemployment was about to explode higher blah, blah, blah. It had Andy Sorkin from CNBC hysterical in the morning as futures plummeted.
Then late in the week, the story was not about the US going down the drain, or how “JJ” (Federal Reserve Chairman Jay Powell) screwed it up, or that inflation remains a real issue. But rather, it was about how claims fell by 16k, thus EASING fear that the labor market is weakening. ARE YOU KIDDING ME?
How about it’s that stocks were all taken to well-oversold levels, and the indexes were left sitting right atop their oversold levels. So, this tiny piece of news (which typically is NOT a real market driver) gave the same algos that destroyed the place on Monday a reason to take advantage on Thursday.
For those without a plan, that followed the crowd out, and are now following the crowd back in, it doesn’t get any more complicated than that.
What’s next? Stay tuned. The chaos is not over. The recent moves are a stark reminder of how quickly it can all change.
But in the end, be confident in your portfolio. Become a bit more defensive by including sectors like consumer staples, utilities, etc. Plus, make sure you know what you own – and in times like this, talk to your advisor if you are concerned.
