1. CPI Comes in Cooler — Market Back on the Fed-Cut Train
Good news: the CPI came in not too hot. This is a win. Why? Because the economy is slowing down in sync, not chaotically. Anything that drives inflation higher while pushing the economy lower is a nightmare to manage.
Now, everyone’s back on the Fed-cut train.
A 50bps cut is even “on the table,” apparently. I think a cut is coming too — but keep a bit of skepticism. What if it doesn’t happen?
2. Yields Ease as CPI Cools — A Global Relief
After the CPI announcement, U.S. Treasury yields moved lower again.
The 10-year and 30-year are easing.
Look abroad and you see the same trend: global yields are cooling.
Take Canada, for example. The 5-year yield has dropped to 2.74%, down from 3.10%+ in July. That’s real relief… for those with renewals coming up.
3. No Fear in the Stock Market — A Dangerous Complacency
I can’t stress this enough: there’s no fear in the stock market.
Why? Because “everything is awesome,” right?
Rate cuts are great for an already overvalued market, aren’t they?
Economy doesn’t matter, and economy and earnings aren’t correlated, right?
Here’s my take: don’t try to predict tops and bottoms — it’s a dangerous game. Trade the trend; you’ll make more money than fighting it. But at times like these, the worst thing you can do is be complacent.
4. Gold Consolidating — Big Levels on the Horizon
Gold was super uneventful after the CPI release and seems to be consolidating.
The big level to watch is $3,675. A move above it could easily take it to $3,800+. On the downside, $3,450 is key support.
Mind you: gold miners are up over 100% year-to-date (GDX). Some names have done far better. Kinross for example is up 150% — last year, in a report I talked about $KGC when it was trading around $7.00, and now it’s at $23.00. Not bragging, just saying.
But don’t get blinded by the rally. Mining companies are having the time of their lives, but garbage floats too. Know what you own. I have seen this movie play out before in 2011.
5. Dollar Weakens, CEO Shake-Ups, and Canada’s Big Projects
Looking at the U.S. dollar index, there’s no strength showing. With rate-cut odds rising, the dollar could come under more pressure. Big support sits around 96.50; big resistance near 100.
Meanwhile, OPEN stock is shooting through the roof on a CEO change — have we seen this movie before?
And then there’s Canada. Big nation-building projects are finally coming. Better late than never, right? It’s hard to believe no one thought of this sooner. Canada has a lot to offer the world, but we haven’t been doing much. Maybe that’s about to change.