(THE JACKSON HOLE SYMPOSIUM WILL STEAL THE SPOTLIGHT THIS WEEK)
August 19, 2024
Hello everyone,
Week ahead calendar
2024 Democratic National Convention Aug. 19 - 22
2024 Jackson Hole Economic Policy Symposium Aug. 22 – 24
Monday Aug. 19
10 a.m. Leading Indicators (July)
9:30 p.m. Australia RBA Minutes
Earnings: Palo Alto Networks, Estee Lauder.
Tuesday Aug 20
8:30 a.m. Canada Inflation Rate
Previous: 2.7%
Forecast: 2.7%
Earnings: Lowe’s
Wednesday Aug 21
2 p.m. FOMC Minutes
Earnings: TJX Companies, Analog Devices, Target, Raymond James Financial.
Thursday Aug 22
8:30 a.m. Chicago Fed National Activity Index (July)
8:30 a.m. Continuing Jobless Claims (08/10)
8:30 a.m. Initial Claims (08/17)
9:45 a.m. PMI Composite preliminary (August)
9:45 a.m. Markit PMI Manufacturing preliminary (August)
9:45 a.m. Markit PMI Services preliminary (August)
10 a.m. Existing Home Sales (July)
11 a.m. Kansas City Fed Manufacturing Index (August)
7:30 p.m. Japan Inflation Rate
Previous: 2.8%
Forecast: 2.9%
Earnings: Intuit, Ross Stores
Friday Aug 23
8:00 a.m. Building Permits (July)
10 a.m. New Home Sales (July)
Later this week, we will be tuned into Jerome Powell’s speech at the Jackson Hole symposium. This speech comes just a few weeks after the July Fed meeting where he gave investors some confidence that a September rate cut was on the table. This confidence was built on “coded statements” from Powell, that appeared to say a lot, without saying anything decisive.
To further confuse investors about the Fed’s actions going forward, we were whipsawed by the Aug 2 non-farm payrolls data, and then the retail sales report and softer inflation data last week.
This week investors will also be able to examine the behaviour of the consumer as we have earnings results from retail chains, including Lowe’s and Target.
We can also pore over weekly continuing and initial unemployment claims data to gauge the temperature of the labour market.
Outside the U.S., attention will focus on inflation metrics, with significant data releases from Canada and Japan.
Goldman Sachs urges investors to “keep the faith” that the U.S. will avoid a recession…
My advice: be ready to take advantage of any volatility going forward. Scale into sold-off stocks and gradually build your positions.
MARKET UPDATE
S&P 500
The market rejected the recent low a couple of weeks ago very quickly. Is that the low? We can never be certain. If it is, then we have made an Elliott Wave 4 pattern low, which should now be followed by the market running up to new highs in the mid-5,700’s or toward 6000. (But don’t expect a straight lineup). Only once this Wave 5 is over, will the bullish sequence from the October 2022 low of 3,492 be complete. And this then leaves the market vulnerable to its biggest corrective sell-off since this bottom. The market will tell us where the top is in its Wave structure over the coming weeks/months.
GOLD
Gold has pierced the $2,500 level, and now seems set to rally to the mid $2,500’s and then $2,670. Support lies around $2,480-$2,450.
BITCOIN
Bitcoin is still undergoing a complex corrective structure. Support is still found in that band between $40k and $50k. We are looking for a sustained break above $60,000 to encourage advance toward the $70,000 level, enroute to the key $73,794 resistance.
QI CORNER
Elon Musk, Albert Einstein, Charlie Munger and many others are big believers in INVERSION THINKING.
What is it exactly?
Let’s throw some light on it by looking at some extracts from Alex Penunuri on X.
- Inversion thinking is a problem-solving technique where you tackle problems backward. Instead of focusing on success, you identify WHAT leads to FAILURE and AVOID those actions. This leads to a faster & easier decision-making process.
- Elon Musk is a big advocate of inversion thinking. He often uses it to avoid pitfalls in his ventures. He identifies potential failures early & steers his projects away from common mistakes.
- It’s also a tool Charlie Munger regularly used. “Avoiding stupidity is easier than seeking brilliance” – he believed. Rather than trying to win, avoid losing.
- Why is inversion thinking so powerful? As humans, we’re better at seeing threats than seeing opportunities. By inverting your thinking, you turn complex problems into obvious solutions.
- Another benefit of inversion thinking is its ability to relieve anxiety. When facing a difficult problem, it’s hard to see the way out. Inversion lets you see situations from a different angle.
- Another example: Building a relationship. What behaviours will ruin a relationship? Judgement, Lack of communication, No respecting the other person. By inverting the question, you can easily see how to avoid a bad relationship.
- What about the business context…What behaviours would ruin a business? Having a bad product. Not promoting your stuff. Giving customers a poor experience. It’s hard to see how to grow a business, easy to see how you can destroy one.
- How can you apply Inversion Thinking in your life:
- 1/ Find the problem
- 2/ Identify the desired outcome
- 3/ Invert it by asking what would prevent that goal from happening
- 4/ Plan to avoid those actions
SOMETHING TO THINK ABOUT
Cheers,
Jacquie
