All Insights


Changing inflation expectations

Fed Rate Cut Expectations Ease

Source: CME Fed Watch Tool

The recent spike in market volatility may be related to the reality that the market is rapidly adjusting the expectations that the FOMC will be cutting Fed Funds rate. Earlier in the year it was expected that the FOMC would cut rates 6 times this year. This has now decreased to the expectation of just 2 to 3 rate cuts now. The CME Fed Watch Tool displays how the rate cut expectation for June have declined from 55.2% one month ago, to just 19.3% today. Continued shifts in rate cutting expectation can lead to continued uncertainty and volatility in the equity and fixed income markets.

Commodities are leading the way

RRG 4-16-24

Relative Rotation Graphs (RRG) are a useful tool for seeing how multiple markets are trading relative to a central index, such as the S&P500 in this case. The top left quadrant represents improving sectors relative to the S&P500 index. Many of the improving indices on a relative basis are commodity-based indices. All the while, the equity growth leaders are rolling over. This may suggest that there is more inflation on the way and the expectation for future rate cuts could potentially decline further.

U.S. Dollar may be exhausted

UUP 4-16-24

After a very strong rally, the US dollar Bullish ETF (UUP), a proxy for the US dollar index, may be exhausted. It has recently hit an RSI of 77.81. This is technically overbought. When the ETF has hit previous RSI readings in this range, it has indicated a meaningful topping formation. Assets that benefit from a declining dollar, such as international equities and bonds, may offer opportunity if the US dollar does reverse course.

Thank you for logging into your Tru-View account.

Currently the funds are being transferred, please check back soon.

Sykon Logo

Log Into Your Tru-View Account

Charles Schwab Logo

Log into your Schwab account
Charles Schwab and Co.

You are now leaving the Sykon Capital’s Website and will be entering the Charles Schwab & Co., Inc. ("Schwab") Website.

Schwab is a registered broker-dealer, and is not affiliated with Sykon Capital or any advisor(s) whose name(s) appears on this Website. Sykon Capital is/are independently owned and operated. Schwab neither endorses nor recommends [Name(s) of Investment Management Firm(s)] [./, unless you have been referred to us through the Schwab Advisor Network®. (This bracketed language is for use by Schwab Advisor Network members only.)] Regardless of any referral or recommendation, Schwab does not endorse or recommend the investment strategy of any advisor. Schwab has agreements with Sykon Capital under which Schwab provides Sykon Capital with services related to your account. Schwab does not review the Sykon Capital’s Website(s), and makes no representation regarding the content of the Website(s). The information contained in the Sykon Capital’s Website should not be considered to be either a recommendation by Schwab or a solicitation of any offer to purchase or sell any securities.

Go Back Continue