Closing Thoughts for the Week

It’s tough for me to see what came out of this past week’s Fed meeting and not think that there’s some kind of ulterior motive at play. The fact that no one in the FOMC sees a recession happening is both confusing and overly optimistic. The bulls sure still seem to think everything is fine and dandy.

The mega-cap rally looks like it’s at least taking a pause here as cyclicals, utilities and small-caps have been leading the way since Memorial Day. Treasury yields continue to hold relatively steady here, but that could change at next week’s Fed meeting. Overall, I think the AI euphoria is starting to die down, but tech stocks have gotten really pricey once again.

It’s become more clear that this path towards recession is a slow burn and a majority of the new data we’re getting suggests the timeline is getting pushed back. What I’m doing is adjusting expectations whenever I get new information and repeating the process of identifying conditions. What I’m seeing now is the potential for a risk-off move later in June following this two-week “stupid” period.