| Dear Reader, Hello, Ed D’Agostino here. On a lower-than-expected CPI print yesterday morning, stock futures shot higher. Prior to the open, DJIA futures were 2.41% higher at 35,094. S&P futures were up 3.13% at 4,151. The gains didn’t hold through the day, but the initial reaction to cooling inflation was unmistakable. Today, the conversation turns to Fed Chairman Jerome Powell’s imminent comments and the possibility of a 50bps rate hike. It’s also possible, given the decline in CPI, a 25 bps move or even a pause is in the cards. The questions probably on your mind given the chance of moderation in Fed policy include: - What if the worst is truly over?
- What if a classic “Santa Claus” rally takes hold and markets surge into the new year?
- What if this is a head fake, Powell and Co. remain firm at 75bps, and markets fall again?
- What are the best names to target, regardless of what happens in the weeks ahead?
I’m reaching out to you today and mentioning these questions because in Monday’s Morning! 5 With Fitz letter, our new partner Keith Fitz-Gerald said: “The markets will take off like a rocket when Powell blinks. Anybody accumulating shares right now will be in the “catbird seat.” Doing so lowers risk, boosts profits, and magnifies compounding over time.” Keith was discussing the distinct possibility of a lower hike and impressing upon his readers the necessity of being in front of the Fed’s next move—not chasing it. I continue to be impressed with Keith’s research, wit, and clear explanations of today’s markets. You can take a look at Morning! 5 With Fitz yourself by clicking here. It’s free to join, carries no ongoing obligation, arrives in your inbox each morning the markets are open, and could help you navigate what comes next. It’s been a valuable addition to my daily reading list. I’m sure you’ll enjoy it too. Sincerely, 
Ed D’Agostino
Publisher, Mauldin Economics |
