State of the Market, November 2nd 2022

Market Overview

The market is currently in a bullish state, though threatened with the Federal Reserve due to meet and announce the potential for tapering of their bond buying program. The market has been in a bullish state since the 1st of October, and has been in a bullish state for 30 days. Oddly, the biggest threat to the equities market seems to be reports on jobs data coming out of ADP and eventually the Bureau of Labor and Statistics. If you’re lazy and are prone to listening to Bloomberg TV, leaving it on in the background (or lusting for the sound of Lisa Abromovich’s voice and her cute demeanor), you may have heard it said by “the experts” that we need jobs to be “under control”.

They don’t want you working and making money

What remains unknown - is if the Federal Reserve wants you to make money…

Much of the conversation is about what the mandate is for the Federal Reserve?

Overheard: Claudia Sahm on Bloomberg mentions that the instiution is not a “national security” institution (that a “war footing” noted below is not in their mandate).

Lazy Trader’s Market Quick Take

The market is bullish, but it is under threat, where will it go next? What is the Lazy Trader doing? Find out in this today’s live Market Report!

Updates

Lazy Trader’s Market Quick Update @ 10:36 AM The consensus is that the market is fragile and we are facing liquidity issues and could be facing problems heading into - tomorrow. Claudia Sahm is visibly upset on Bloomberg.

Currency Exchange Rates

  • The USD is currently trading at 1.0 USD to 1.0 USD, nominal.
  • The American Dollar is: Strong
    • The strong dollar continues to threaten commodities and equities and how they play hand in hand.
    • Nations, especially Japan, continues to threaten to intervene in the currency markets to weaken the dollar.
      • Japan’s actions in markets has been hidden away from the public eye, but it is known that they have been buying up US Treasuries and other assets to weaken the dollar and agreeing to overlook regulations to compound capital.
    • America threatens the UK more than many other nations.
    • The Federal Reserve is stuck to the need to follow their mandate in controlling inflation and keeping the dollar strong when the capital markets are in a fragile state caused by a dollar too strong for the supply.

Question: Should the Federal Reserve be on a war footing? Answer Europe already is. (Claudia Sahm, fomer Federal Reserve Economist - Bloomberg TV ~ 10:39 AM)

Commodities & Equities

“A pound of hamburger is up 32%” Bloomberg TV, November 2nd 2022 @ 7:26 AM

Bonds & Fixed Income

Overheard Today:

Guest Topic
Gregory Peters (PGIM Fixed Income Co-CIO) Discussion is about the shift to a new regime for interest rates, in that the question comes up - is the new regime that the public fixed-income market would be a constant competitor and threat to the private bond and fixed income markets?

Crypto

  • At 10:30 AM:
    • ETH is down ~1% over 24 hours
    • BTC remains relatively unchanged

Conclusion & Confusion

Today will be a day of confusion for many Lazy Traders! The market is actually up compared to what it maybe should be, even while many bulls push for more growth than the markets look to want to produce. It is important to be prepared for the Federal Reserve today at 2:00 EST (@ 10:32 AM)

Post-Close Market Reactions

Today the Federal Reserve decided to raise interest rates by 75 basis points, the markets reacted wildly, then someone asked the chairman how he felt in regards to the markets rallying to the news of interest rates rising - that equities, risk assets were responding positively to the news - and he responded that he was not concerned about the markets, but that he was concerned about the economy, his mandate. What was observed is that, despite the reporting being incorrect - that markets were indeed down on the news - the Federal Reserve Chair did not care. That’s kind of awesome if you consider that this guy is basically pimp slapping the Dow, S&P and crypto markets with one swipe.

I’d update more, but I’m lazy and I’m going to go back to watching the markets and not typing. I’ll update this post later if I feel like it. @ 4:42 PM


Backmatter

Meta

LazyNotes:

This article is a #Live note and should be considered a living document, thus will be updated over the course of the day (2022-11-02).

About the Author

Lazy is both lazy and crazy, but he is committed to helping you live a lazy life. Follow him here to learn how you too can be “successful” despite the drive to do nothing at all (including updating this website).