When you look at the totality of the current environment - utilities are rallying in spite of other defensive sectors heading the other way, lumber is nose diving while other commodities are running higher and gold is experiencing a parabolic move up - there are a lot of risk-off signals flashing warning signs. The dollar has a couple of catalysts in front of it that could move the currency in either direction.

The markets are still anticipating rate cuts and I think there’s a chance that Powell doesn’t give it to them. If there’s a hawkish pivot coming from the Fed, I’d expect stock prices to start falling again and the signals may be sensing some of that. If there’s one thing that I think the market is really underestimating right now, it’s the impact of Japan on the global economy.

The fact that there’s such unanimity right now in the idea of loosening monetary policy conditions at this time suggests that someone knows something that they’re not saying out loud yet. I think that investors, despite their outward bullishness, may be realizing that there are some underlying concerns with how central banks are handling the current situation that could turn things south pretty quickly.