Broad Market Outlook
As the "recession" talks take over the topic of discussion anywhere more then 2 adults gather, most become aware of the obvious when its too late. Or if you are a government, you can just change the definition to find your agenda.
As most are telling each other about a recession that is coming that they cant explain until now as the meme's have covered your social media feed that basically everyone should know a recession is 2 quarters of falling GDP.
All this talk has little effect on us. As we always stick to the mantra of turning off the news and getting rid of the noise we continue to focus on what matters as the charts really do all the talking, not people opinions.
The 10 Year continues to follow the path of Energy as it has successfully broken support and continues to roll over as the FED continues to "talk" there book about more rate hikes, yet the market continues to price that in.
As we have mentioned in prior Big Pictures, the more the 10 year falls, the more of a boost the equity markets should get.
In a simple way, if you could borrow money for free, would you use it to invest? The answer is probably yes, if that same money to borrow cost 10% interest, would still take it? The answer is probably not, with businesses that question is the same. Cheap debt equals an easy way to grow if used properly, expensive debt even if used properly still can be dicey.
Make it cheap to borrow and GDP grows, make it more expensive to borrow and GDP shrinks. But don't worry, definitions and economics are open to change when fitting.
As the 10 year continues to fall chart wise, not opinion wise, the broad markets and sectors should continue to take the stairs as they climb back into the middle of the overall range and then eventually (imo) closer to end of year/2023, we will be back retesting the ATH's.
With that being said, most major markets and sectors are 3rd/4th day up and most heading directly into prior retests or major resistance areas. Just when everything looks rosy in the short term are often the times to ring the register.
Taking profits into next week after these extended moves most likely would be a wise one and then being patient for those 3-4 day pull backs before looking to get back in.
Don't come into Monday guns blazing, come in offering out ammo to the unprepared in exchange for cash.
Macro Rotation Outlook