Well, that took the Edge Off

I want to try and keep this week’s write up to three or four paragraphs. The market narrative is even briefer, it is either risk on or risk off and the explanations come thereafter. Powell and his usual word salad on Wednesday left many writing “Goldilocks” economy and the Fed is going to start cutting in September. The QQQ jumps from $457.53 to close at $471.07. Then, Thursday at 10AM the ISM Manufacturing PMI showed a drop from 48.5 to 46.8 (versus expectations of 48.8). Below 50 signals contraction! The QQQ drops from $471.07 to $459.66. Look below. ISM Manufacturing has told us nothing on the economy overall, has it? It has mostly been below 50 since 2022 and 2023 it was in the 46s most of the year. GDP grew call it 2.5% both of those years.