From the desk of Vance Howard:
Last week was a central bank-intensive week, with policy decisions coming from major central banks including the Fed, Bank of England, and Bank of Japan. Volatility was primarily centralized around Wednesday’s FOMC decision, with the S&P 500 falling 2.8% and US 10-Year surging since then, as markets digested a “more hawkish” 2024 SEP than originally anticipated.
The market sold off last week, which looks to be a classic retest of the previous near-term low. The HCM-BuyLine® is still positive, so pullbacks should be considered buyable, and this pullback is no different. A lot of factors are putting pressure on the markets, such as the Fed’s hawkish tone, the United Auto Workers (UAW) strike, and what appears to be another government shutdown, which is getting old by the way. Despite headline risks in the near-term, we remain constructive through year-end as inflation remains key and we believe it is on a glidepath lower. We still see the market having a meaningful rally going into Q4, possibly going up to 4700 on the S&P 500.
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