S&P 500 Holding Well Awaiting Debt Crisis Impasse

$SPDR S&P 500 ETF Trust(SPY)$ 20% gain from taking calls from the reversal. US initial jobless claims reached the highest since October 2021 while producer prices rose 0.2% in April, trailing economists’ estimates for a 0.3% increase.


The market could break out of the current lackluster phase if inflation data proves to be benign, raising hopes for a Federal Reserve pivot in June. The immediate concern is regarding a potential resolution for the debt crisis impasse.

⚠️ Looking at calls above 413.24 and puts under 411.5 on Friday. Consumer sentiments data at 8:30am.

Dip buying shows a strong market

The Federal Reserve’s target rate is finally above annual headline inflation, following the central bank’s decision to tighten policy this month and the April CPI data reported this week. 

Looking at Thursday’s strong sale of the most inflation-sensitive Treasuries — 30-year bonds — adds to the impression that investors are signaling “game over” to the Fed in its battle against cost pressures.

Even setting aside the the lowest jobless rate since the 1960s, that continues to seem like an overly optimistic reading. The Fed has usually kept hiking, and then held policy even with its target well above inflation in previous cycles, most of which came with inflation rates lower than the current one. 

Indeed, the negative real yields on the Fed’s target and for 10-year Treasuries had been extremely rare until the post-2008 era of quantitative easing and global disinflation. Policymakers may see their job as something like halfway done at this stage.

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  • AdelaideFox
    ·2023-05-12
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    $标普500ETF(SPY)$ The feds are injecting. By manipulating the VIX, it takes less liquidity for them to pump the market.

    ┗|`O′|┛ ┗|`O′|┛┗|`O′|┛

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    • ZEROHERO
      All tools are available for their disposal
      2023-05-12
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  • ChrisColeman
    ·2023-05-12
    TOP

    I’d say don't ever assume the stock market will go down. Thats what I did after the Covid crash and lost my shirt.

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    • ZEROHERO
      Agree. A year of bear = 4 years of bull. We’re on the verge of a breakout so let’s get prepared for it.
      2023-05-12
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  • WayneEvans
    ·2023-05-12
    TOP

    Default will cause the crash! Be careful

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    • ZEROHERO
      Another political opera by both parties. Don’t think a default will happen. At the most a delay but the consequences will be bad enough.
      2023-05-12
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  • Yaomao
    ·2023-05-12
    TOP

    Debt crisis🤔🤔 that's really a complex problem. 💔

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    • ZEROHERO
      Keep raising the ceiling will do 😅
      2023-05-12
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  • Loyster
    ·2023-05-13
    TOP
    market too complacent
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    • ZEROHERO
      Optimistic sentiment with CPI & PPI data but debt ceiling appears as next challenge
      2023-05-13
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