Market TalkThe day after the Fed raises near-term interest rates, while longer-term rates have already been increasing, is not necessarily a good barometer for judging the ultimate stock market impact.
With oil and gas prices raising the cost of energy to produce and deliver goods and services, it seems like a no-brainer that inflationary pressures could increase. Against that backdrop, the Federal Reserve had little choice but to raise rates by 25 basis points, or 0.25%.
But the bigger issue for the market may now be uncertainty.
Higher energy costs, higher short-term rates, higher long-term rates and the possibility of additional Fed tightening put risk on the table from several directions at once. In fact, 16 of 18 Fed policymakers currently project at least one more quarter-point rate increase by year-end.
The market now has to determine how much of that risk has already been priced in — and how much has not.
One day of trading after a Fed decision doesn't answer that question.
For now, uncertainty raises risk, and that can translate into a risk-off posture, with stock managers pulling back on positions they deem particularly vulnerable to changing market conditions.
Stock Talk
As the Middle East wavers between conflict, war and economic sanctions, the word "uncertainty" takes on new meaning when trying to predict what comes next. For the moment, it's simply too hard to know enough from the Jones Report view.
On a day-to-day basis, perhaps the market sees commercial inventories of oil and refined products edge a tad higher, while forgetting that our Strategic Petroleum Reserve remains near its lowest level since the early 1980s.
That may provide some comfort for a day. It doesn't remove the larger uncertainty. Yesterday's reaction to the short-term jigs and jives in oil inventories resulted in a whipsaw down in oil and gas stocks and served as another reminder: sector volatility makes these stocks difficult to "day trade."
Some may translate a period of higher risk and volatility into reducing previously overweight positions into smaller "some" positions.
Moving to the tech sector, recent banter about the dangers of AI and the need to constrain or "slow down" potentially dangerous developments can put a damper on perceptions of future growth in AI data centers and the supporting systems and products projected around them.
One view here is that the "genie is out of the bottle" — and AI is here to stay, like it or not.
One potential opportunity on the horizon may involve the Anthropic IPO, currently reported as possibly launching in the mid-October time frame. One company that invested in Anthropic early on is SK Telecom (SKM), the South Korean ADR.
SK Telecom announced an additional $100 million investment in Anthropic in 2023, following an earlier investment by its venture-capital arm. With SKM already an earnings-producing company, some investors may view the stock as one indirect way of gaining exposure to whatever value eventually emerges from Anthropic.
Of course, an Anthropic IPO does not automatically translate dollar-for-dollar into SKM's stock price, and IPO timing and valuation can change.
Balancing what position to take — if any — in a volatile market can feel tricky. One way we try to look at this is with that familiar Jones word: "some," if so inclined to dabble.
For now, this report will serve as the Jones Report update while market conditions resolve. However, as an afterthought, market corrections in sectors can also create buying opportunities for prudent investors. Just be careful not to jump under falling knives.
One such stock that somewhat "ran away" from us is Lam Research Corporation (LRCX), a company highlighted here much earlier in its run. LRCX subsequently climbed to a 52-week high above $438 before cascading back into the $260-$270 range.
At these levels, the semiconductor equipment company becomes more interesting again. Lam fills a ubiquitous need in semiconductor manufacturing, and one way to approach a volatile stock like this might be just ONE share at a time while possibly building a longer-term position.
Some — not too much.
As always, maintain some dry powder and stay watchful — even with the stocks you have conviction on. Stay tuned. As conditions unfold, “some” opportunities still hide inside uncertainty and are worth posting about, as long as the word “some” tempers the bull.
- Jones Report
The day after the Fed raises near-term interest rates, while longer-term rates have already been increasing, is not necessarily a good barometer for judging the ultimate stock market impact.
With oil and gas prices raising the cost of energy to produce and deliver goods and services, it seems like a no-brainer that inflationary pressures could increase. Against that backdrop, the Federal Reserve had little choice but to raise rates by 25 basis points, or 0.25%.
But the bigger issue for the market may now be uncertainty.
Higher energy costs, higher short-term rates, higher long-term rates and the possibility of additional Fed tightening put risk on the table from several directions at once. In fact, 16 of 18 Fed policymakers currently project at least one more quarter-point rate increase by year-end.
The market now has to determine how much of that risk has already been priced in — and how much has not.
One day of trading after a Fed decision doesn't answer that question.
For now, uncertainty raises risk, and that can translate into a risk-off posture, with stock managers pulling back on positions they deem particularly vulnerable to changing market conditions.
Stock Talk
As the Middle East wavers between conflict, war and economic sanctions, the word "uncertainty" takes on new meaning when trying to predict what comes next. For the moment, it's simply too hard to know enough from the Jones Report view.
On a day-to-day basis, perhaps the market sees commercial inventories of oil and refined products edge a tad higher, while forgetting that our Strategic Petroleum Reserve remains near its lowest level since the early 1980s.
That may provide some comfort for a day. It doesn't remove the larger uncertainty. Yesterday's reaction to the short-term jigs and jives in oil inventories resulted in a whipsaw down in oil and gas stocks and served as another reminder: sector volatility makes these stocks difficult to "day trade."
Some may translate a period of higher risk and volatility into reducing previously overweight positions into smaller "some" positions.
Moving to the tech sector, recent banter about the dangers of AI and the need to constrain or "slow down" potentially dangerous developments can put a damper on perceptions of future growth in AI data centers and the supporting systems and products projected around them.
One view here is that the "genie is out of the bottle" — and AI is here to stay, like it or not.
One potential opportunity on the horizon may involve the Anthropic IPO, currently reported as possibly launching in the mid-October time frame. One company that invested in Anthropic early on is SK Telecom (SKM), the South Korean ADR.
SK Telecom announced an additional $100 million investment in Anthropic in 2023, following an earlier investment by its venture-capital arm. With SKM already an earnings-producing company, some investors may view the stock as one indirect way of gaining exposure to whatever value eventually emerges from Anthropic.
Of course, an Anthropic IPO does not automatically translate dollar-for-dollar into SKM's stock price, and IPO timing and valuation can change.
Balancing what position to take — if any — in a volatile market can feel tricky. One way we try to look at this is with that familiar Jones word: "some," if so inclined to dabble.
For now, this report will serve as the Jones Report update while market conditions resolve. However, as an afterthought, market corrections in sectors can also create buying opportunities for prudent investors. Just be careful not to jump under falling knives.
One such stock that somewhat "ran away" from us is Lam Research Corporation (LRCX), a company highlighted here much earlier in its run. LRCX subsequently climbed to a 52-week high above $438 before cascading back into the $260-$270 range.
At these levels, the semiconductor equipment company becomes more interesting again. Lam fills a ubiquitous need in semiconductor manufacturing, and one way to approach a volatile stock like this might be just ONE share at a time while possibly building a longer-term position.
Some — not too much.
As always, maintain some dry powder and stay watchful — even with the stocks you have conviction on. Stay tuned. As conditions unfold, “some” opportunities still hide inside uncertainty and are worth posting about, as long as the word “some” tempers the bull.
- Jones Report
This site is just for fun and insight, with no sponsors and no affiliations. If you like this free Jones Report, tell a friend. Why not?
________
______________
More later so ....Stay tuned, if you dare!
For now, we close by noting that any view on the market and stocks on any particular day may change in the days to come. That is why we watch and see how our views match up with reality. Looking ahead a few months may be a way to do things - but thinking too deeply about world events and the recent alliances forming, can make projecting ahead a dicey endeavor.
All in all - we use the word maybe "some", not "too much" and play it accordingly. Never get arrogant in our notions because things do change - and individual stocks are subject to many factors outside our control. So, we try to -stay aware.
With all the above caveats and attempted prognostications, I will close this post. Stay tuned for more opining on the market and stocks to watch.
ALL in my humble opinion, scroll down and read more. This site does NOT make Buy / Sell recommendations.
