Fed rate cuts always lead to stock-market gains — but this one thing must happen too, veteran Wall Street strategist says

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A look at past Goldilocks environments shows good results for the stock market.

It’s way too early to proclaim a Goldilocks environment, even if major asset classes are at least pointing to a better chance of it. The S&P 500 SPX has gained 5% this year, and the tech-heavy Nasdaq Composite COMP is up 8%, even with a seemingly daily stream of job-cut announcements. Stay tuned Thursday to a barrage of economic data.“The... It’s way too early to proclaim a Goldilocks environment, even if major asset classes are at least pointing to a better chance of it.

“But for the stock market to produce such impressive results, the economy needs to avoid a hard landing. Otherwise, the probabilities favor lower prices sometime over the months ahead. Given this binary situation — recession or no recession — it is understandable why market participants are so fixated on the macroeconomic data,” he says.

Joshi advises remaining defensive on a six to 12 month horizon, by overweight bonds to stocks, healthcare versus technology, gold versus oil, and the Japanese yen versus the euro. And he said Feb. 15 will be a crucial date — when the next retail sales report comes out. The buzz Fourth-quarter gross domestic product data is due, alongside weekly jobless claims, durable-goods orders, the advanced trade in goods report and after the open, new-home sales.

 

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Wall Street totters after mixed earnings, trade halt glitchWall Street was mixed on Tuesday as a raft of mixed earnings took some wind out of the sails of the recent rally.
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Explainer: Wall Street's market glitches and the repercussionsThe New York Stock Exchange (NYSE) suffered a technical problem at the opening of trading on Tuesday that caused more than 80 stocks to be halted for several minutes, creating confusion among traders about which orders were filled and where stocks were trading, and harking back to the 'flash crash' of 2010. Expecting Snow tomorrow dress warm and shovel light.
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