Coach Mark here.

That was exciting yesterday, wasn’t it? In the words of the immortal Ron Burgundy, “Boy, that escalated quickly. That really got out of hand fast.” I am surprised CNBC did not run a “Markets in Turmoil” after yesterday’s price action. Let’s take a deep breath and see if we can figure out what happened.

If you just read the headlines after yesterday all you will ready is some version of “Powell Jolts Markets.” If you did not watch the press conference you would have thought Powell rained hawkish hellfire to talk markets down after such a bullish run. Well, I did watch the press conference and that is not what happened.

That was NOT Jackson Hole 2.0 (referencing 2022 when Powell did lash out at the markets at their Jackosn Hole Symposium). That was a boring Jay Powell yesterday. He did not attempt to talk down the markets. Heck, he even opened the door for a March rate cut! If he wanted to send a message to all those crazy bulls pushing up price, he would not have done that.

 Want to know how hawkish Powell was? Yields were down at the end of the day from where they were when Powell started. They continue to fall today. Bonds are in rally mode! Bonds saw what I did.

So why did equities sell off so aggressively? These things happen occasionally when you are deep into an intermediate trend that has not had pullback of consequence. Things get a little wobbly if people even sense that something might not be perfect. A lot of “priced for perfection” thoughts out there with equities and with not the most stellar earnings season to this point, any whiff of a negative news story is going to cause a jolt.

Apple, Amazon, and Meta tonight after the bell. Let’s see if they can provide the bulls some juice as we close out “Juggernaut Week.”

Chart of the Day: 10-Year Treasury Index

Yields continue to fall after The Fed yesterday…in dramatic fashion. Yields falling for the “right reasons” (i.e. no recession) can be viewed as bullish for most asset classes.

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