-- Wall Street’s summer to forget is approaching its climax, with all eyes on this week’s consumer prices report, which traders hope will give the Federal Reserve the ammunition it needs to begin cutting interest rates at its next meeting in September.Some wild swings last week brought the Cboe Volatility Index, or VIX, which measures the magnitude of price moves in the S&P 500 Index, to levels not seen since the height of the pandemic in 2020.
“We’re at an inflection point where what had been bad economic news is now perceived as good news since it would be a catalyst to force the Fed to pivot,” said Thomas Urano, co-chief investment officer and managing director at Sage Advisory in Austin, Texas. “But if data continues to soften, that backdrop will disappoint stock investors and lead to larger swings in stocks.”
“All the quantitative easing money that was accumulated in the capital markets and then was allocated via private-credit distribution has muted the impact of an inverted yielded curve — but that doesn’t mean the concept of it is useless,” Urano of Sage Advisory added. “It’s still relevant, just takes longer to manifest now.”
“If the Fed cuts rates dramatically because the economy is slowing, that’s not historically good for stock returns,” said Brooke May, managing partner at Evans May Wealth, who’s firm is snapping up Big Tech stocks. “But the economy isn’t as bad as people think. I expect more volatility and wouldn’t be surprised to see more downside for stocks in the coming weeks.”B&G Foods Second Quarter 2024 Earnings: EPS: US$0.