Break Out! The major U.S. stock indexes finally escaped the range they’d been trading in for much of the last month after reports that the U.S. and China will talk trade in October. The 2-year Treasury yield had its biggest jump since 2015, as investors went on the offensive. In today’s After the Bell, we…
•…ponder where the S&P 500 is headed next;
•…marvel at the pessimism in the market (Including my own);
•…and explain why the Federal Reserve will likely cut interest rates in September.
And just like that, the stock market decided it wouldn’t be held back any longer.
After a month of big one-day moves but little actual movement, the S&P 500 and other indexes finally traded outside the range. That they did it to the upside surprised many, including me—I was on record arguing that the risks were to the downside. I’ve been worried about the inverted yield curve, slowing manufacturing activity, and what not—and I still am.
The market, however, is always right. And with the range being broken to the upside, the path of least resistance, at least for now, is higher. “The S&P [is] breaking out from a one-month trading range…in a bullish short-term development,” writes Fairlead Strategies’ Katie Stockton. “Next and final resistance is at the August high, approximately 3028 for the SPX.”
It helps that many investors