The investor community is so focused on the speeches of Fed members that they tend to forget what really matters: the market’s opinion. The market has a different message than the Fed lately.
We already mentioned it multiple times and we will continue to say so: what the market does is important, not what opinion makers are saying.
Are Economic Experts Lying Or Confused Or Both? (January 12th)
2008 vs. 2022: Similarities and Differences (December 25th)
The Single Most Important Chart Of 2023 (January 8th)
It is so easy to get lost in the endless stream of news and events. It is an addiction to some degree.
Over here, at InvestingHaven, we are addicted to the charts. That’s because we want to stay focused on the message of the market which is 10x more important than all experts, gurus and media combined.
Below is one of the few leading indicators that you better take seriously: yields.
In the last 8 trading days we got a bunch of economic data, primarily labor and inflation related data. What really matters is the reaction of the market to those data points.
The market is pushing yields lower, 10 year yields are now for the the first day below their long term rising channel. While this is not a confirmed breakdown, it is clear that yields are not in an uptrend, on the contrary.
The market is speaking, clearly. Monetary tightening is coming to an end.
The voice of the market is more important than the voice of Fed members speaking at this very point in time. We saw this coming when we wrote this research note Must-See Charts: Q1/2023 Will Be Crucial, 7 Timing Conclusions, 2008 Comparisons on December 24th.