Last quote by John Canally
John Canally quotes
You are still pointing to a December hike, they just didn't pre-commit to it.
I'm surprised they didn't put the 'next meeting' into the statement, but maybe it was election-related. In the past six days, there's been federal agencies getting involved in the election, and maybe the Fed didn't want to…sound like they're even more ready to hike rates than they were.
I think that was just a nod to the political shenanigans going on. The case for an increase in the federal funds rate has continued to strengthen and instead of saying further evidence, they said 'some' further evidence. That seems like the bar is low.
The market has to get used to the idea that inflation is rising for a reason. Some of the more hawkish Fed governors have been preaching that for a while.
Now some market participants may have caught onto that.
They said the risks are balanced, which is interesting, and they're preparing markets for a tightening in December, unless something goes off the rails ... like Brexit goes off the rails, China goes off the rails or the election. That could be one of the things.
I think they're setting up for December, unless things go off the rails. Now there are three dissenters, and I think that's pretty unusual, and it shows you they are really ready to go.
She's probably going to impose more regulation on financials than Mr. Trump would, and so you're starting to see some underperformance in financials as she becomes more of the clear-cut winner in November.
So far, it's been the financials. Financials have struggled here as Mrs. Clinton has started to lead in the polls.
What's happening this year is you have both sides of the aisle ? showing more headline risk.
The consumer in the second quarter was just off the charts. You can't expect it to be as robust in the second half of the year.
The theme that's emerging is Trump is the chaos candidate for markets. They probably reluctantly want to see Clinton's numbers go up. That's a potential wild card, watching those poll numbers, particularly out of key states.
We're in that transition mode from micro back to the macro. Stocks have been in a narrow range near all-time highs, and we're looking for a way to bounce. I think a lot's going to be keyed on the path for the Fed.
There's this lingering angst [around] China. Will they or won't they repeat what they did with their currency?
They upgraded the economy a little bit, which they should have because the data is better. They maintain that they're monitoring global economic and financial conditions. They didn't hint at September at all. I think that gets everyone focused on Jackson Hole to see what's next.
If asked about September, they would say every meeting is live. But maybe they're preparing markets for thinking about perhaps raising rates in December.
The downshift is underway based on history. But it has to go from 200,000 to 50,000 per month to indicate recession, so we're a long way from that.
I think the question today people will be asking is, does this put the Fed back on the table for July? It's going to get that conversation started but it's probably a stretch for July given all the Brexit uncertainty.
If executives use Brexit as an excuse to take down earnings guidance by more than a couple of percentage points, then I think markets will be in for a pullback.
If that gap narrows, that creates volatility, because I think markets will be more comfortable with a Clinton presidency than a Trump presidency.
The oil glut has gone away. We've had declining oil production in the lower 48 states and that's the biggest difference in the markets today. Oil is becoming balanced.
We're trading on the Brexit polls. Markets are better priced for it today than a week ago, but they are still not fully priced for a 'leave' vote.
I think you're in sort of the global growth fear mode again. This one may last longer because the Brexit vote is enough to keep those global growth fears alive, because if they [leave the EU], they may destabilize a region that's already struggling.
We would not be surprised to see a 5 to 10 percent [stock market] pullback in the next couple weeks, maybe ahead of the Brexit vote.
We're right at the top of the range for stocks.
Your near-term black swan is that vote. The market is dead convinced they'll remain. If they leave, it's going to be bad. It'll inflate the value of Treasurys. It will inflate gold. Stocks will sell off. Markets have just not priced that in.
It's a very, very range-bound market. Most people are waiting around, like we are, to buy the dips as soon as there's a 5 percent dip. I think too many people are in the neutral camp. The Fed and Brexit are the two big fundamental catalysts and we do need to see some follow-through in earnings.
If every single one of those was a report that was way stronger than expectations and showed the slack in the economy had been taken up at a rapid pace here in the second quarter, then all else being equal the Fed would probably raise rates in June and sit back and wait. That's barring any kind of January- or February-like global disruptions. Do I think that's likely to happen? No.
They're just trying to say, Listen guys, we're serious. We're going to raise rates twice this year. A lot of it is nudging. The Fed doesn't want to surprise the market.
It's probably going to downshift into the 150,000 area. It just has to. We're later in the business cycle. Just from the math alone, we've added a lot of jobs.
I think if you get a stable read on global manufacturing this week, that will really calm fears of a global recession.
It's a report that says to the market, if you're worried about a recession, that's ridiculous. If you're worried about the Fed, there's nothing to worry about. It's the best of both worlds for the markets and the Fed.
The management of the Chinese economy is the real concern. All that matters for markets right now is 'China can't get their act straight.
China's been such a big driver of global growth for 15 years and now they're not, and they don't seem to have a plan for the next 15 years.
The Fed will see through it as a weather issue. I don't think they will change after one month of anything bad or good – so they are going to stay the course.