Republic Risk: Bitcoin Surging, Stocks Reverting, and the Next Three Geopolitical Threats

Who needs Folgers when you can have a conversation about problems in Russia and Egypt at 6 am...

Equity Storm Watch Is GREEN on the S&P 500 and GREEN on the Russell 2000

Historically, the worst two-week period for the S&P 500 is over… and survived unscathed. As we’ve seen, there is now a fleeting expectation of interest rate cuts not only in the first quarter of 2024… but also in the second quarter. I’ve been on the record suggesting a cut in July, but even that is now under attack. Apollo Management Chief Economist Torsten Slok said he doesn’t expect a rate cut… this year. 

He cites an economy doing well (from a macro perspective), a recent uptick around inflation, and a few other minor factors that will stop the Fed’s inflation fight. While we continue to wonder what this means for the financial markets, we must look at the Fed’s other tools. That’s its balance sheet. According to the weekly SOMA report, the Fed only cut $11 billion from its balance sheet this week. And as we’ve seen, the central bank isn’t genuinely committed to slashing its balance sheet at the $95 billion a mo…