Every time US stocks adjust to higher bond yields Jerome Powell reminds the market that rates can go even higher than many think, his testimony overnight sent the US 2 years above 5% and 10 years up towards 4%. Overall the news from the Fed wasn’t surprising just a reality check i.e. a simple reminder that the outlook of “higher for longer” should be taken seriously by markets.
- From a risk/reward perspective we like US stocks into dips with tech remaining our preferred market area.
- February’s jobs data will play a pivotal role in rate expectations this month, perhaps after 10 consecutive surprises on the upside economists will get this one correct.
MM remains cautiously optimistic about US stocks through March
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The combination of a resurgent $US and increased recession fears sent “Dr. Copper” down -2.8%, we are looking for ongoing underperformance from our miners due to these 2 factors plus China’s downbeat economic forecast over the weekend.
- We intend to remain patient with regard to increasing our resources exposure.
MM likes copper into weakness under $US400
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