June Rate Hike Odds Plunge

Friday’s jobs report has shaken Wall Street’s expectations. The Fed meets again next week and the futures market thinks there’s less than a 1-in-25 shot they’ll raise rates. That might even be understating it. Expectations for a July hike are now down to 35%.

Cyclical stocks are doing well today which is a continuation of the trend since late January. When the economy does better, Wall Street shifts from defensive areas like consumer staples and healthcare to more economically dependent areas like industrials and energy. These cycles tend to last a few years.

The S&P 500 just broke above 2,110. If we hold here by the end of the day, it will be our highest close since July. It’s interesting how 2,100 held like a brick wall for so long, and it took a lousy jobs report for us to break through.

Posted by Eddy Elfenbein on June 6th, 2016 at 11:55 am

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