Stocks Price Out The Debt Ceiling That Was Never Priced In To Begin With
How the Debt Ceiling Resolution Revived Wall Street's Spirits
Overall, the markets had a pretty good week. The first half of it looked a little more how I thought it might once it appeared that the debt ceiling battle neared a conclusion, which was stocks selling off on the news and bond yields moving lower. Another hot jobs report pulled the buyers back in and reinforced the notion that the bulls are still in control here. For as much as we try to identify counter-narratives and look for weaknesses when everyone else is looking for strengths, 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.
People on Twitter like to criticize when I say “April” and then “May” and then “June”, acting like I’m randomly aiming at a moving target. What I’m doing is adjusting expectations whenever I get new information and repeating the process of identifying conditions. When we get a jobs report that shows unexpected strength, I adjust my views accordingly and don’t anchor on outdated information. It’s a process we should all follow when trying to evaluate conditions.
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