Market Jitters at Fed Rate Cut Delay, Recession Fears Rise

DavidMarlin
08-02

The beginning of Fed rate cuts is a crossroads moment for the market.

If there is no recession, stocks tend to perform quite well.

If there is a recession, a Bear Market typically looms.

Today’s sell off appears to stem from distress that the Fed didn't cut rates yesterday and that Sept. will be too late.

The catalyst for today’s reversal was recessionary type ISM Data released at 10 AM.

The ISM jobs subindex cratered to 43.4 from 49.3, the weakest reading since June ‘20, and even lower than the 45.4 reading in Sept ‘08 (the month Leman collapsed).

$S&P 500(.SPX)$ $SPDR S&P 500 ETF Trust(SPY)$ $NASDAQ(.IXIC)$ $NASDAQ 100(NDX)$ $Invesco QQQ(QQQ)$ $DJIA(.DJI)$ $GLOBAL X DOW 30® COVERED CALL ETF(DJIA)$

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The recessionary trade was in full effect today following weak ISM data.

Cyclicals underperformed Defensives by 429bps, one of the worst days in the last 16+ years.

The only other comparable days were during the March 2020 Covid Crash and 2008 GFC.

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https://x.com/Marlin_Capital/status/1819134763820580937

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