Market Sees Less Than 2 Cuts in 2024 - What That Means for Your Portfolio

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Nasdaq 100 Notícia

S&P 500,US Dollar Index Futures,United States 10-Year

Market Overview Analysis by Michael Kramer covering: Nasdaq 100, S&P 500, US Dollar Index Futures, United States 10-Year. Read Michael Kramer's latest article on Investing.com

surged. However, the big news came yesterday when Jay Powell noted that it would take longer for the Fed to gain the confidence needed to start the rate-cutting process because the progress onthe first rate cut coming in November, pricing in fewer than two rate cuts in 2024. I’m sure this must be a stunning turning event for readers of this commentary, but that is what is happening right now. It’s hard to believe that the Market saw more than 7 in December.

It was a horrible blunder, even at the time. Unless there was some hidden goal, such as draining the reverse repo facility, which is now nearly completed, it could even be complete; going back to, say, 2014, it used to average around 125 billion a day, and so it is possible that it may not go completely back to zero.

It is an interesting scenario and one we haven’t seen much of that I can remember. One would think, though, that the 5,000 strike price could serve as a magnet pulling the index lower. Meanwhile, there is a $12 billion delta put position up at 5,100 and a $10 billion delta put position at 5,000., which the ETF typically buys back the day before opex is looking like it may be a non-even this month, as the notional value of the call is worth a mere $2.

Finally, as taxes came in, the TGA rose to around $900 billion yesterday. That number will probably continue to climb over the next day or two and could top out at around $1 trillion. Last Wednesday, that value was at $672 billion, and so we are talking about a sizeable increase in the TGA of around $275 billion or so.

 

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