• The market sure knows how to punish the doubters

• The recent negative narratives are gone

• The Fed cuts; Powell tries to scare the market; it does not work

• Geopolitics are noisy again, but international markets are showing growth

• Bank credit rumblings are quieting down (but there might be other worries)

• Earnings are great!

• Inflation is still here, but it is still not a worry

• Housing prices are still high, and turnover is still low

• Quick Hits

• Where did all the crypto money go?

• Chart Crime of the week

The market sure knows how to punish the doubters.  Two weeks ago, we dismissed most of the mini-narratives that popped up.  We figured the latest tariff spat would blow over (it did).  The turbulence in the credit markets would be fleeting since the hiccups appeared to be pure fraud (it was).  Nobody cares about the government shutdown (there was one?).  And, of course, the business of Artificial Intelligence was beginning to make more sense (and cents).

Monetary policy was one area that did not get relief from the accidental missteps by Fed Chairman Powell.  We joked about the first rule of monetary policy is to not talk about tightening liquidity.  As it turns out, Powell was dropping hints about his hawkish Fed statement at this week’s FOMC meeting (Federal Open Market Committee…the rate and policy setting body).  And Powell followed through with his most hawkish comments in a while.  But lo and behold, the market responded like Lloyd Christmas in the lobby bar…it didn’t care.  Strong Earnings in a growing economy with an interest rate cut (regardless of Powell’s comments) spurred the market higher.