Republic Risk Letter: The IMF Calls the West's Number (And Inflation Runs Hot)

The surprise downgrade to the long-term U.S. fiscal picture by Fitch Ratings angered a lot of Modern Monetary Theory apologists. But reality is setting in on U.S. debt levels.

Equity Index Strength

Neutral on the S&P 500 and RED on the Russell 2000

Each morning, we assess the full flows of the market by measuring statistical metrics on a very specific number of stocks to determine broader sentiment and the momentum trend.

When these readings turn red, we focus on cash and positive sectors or take inverse positions against indices. When they are green, we target stocks with strong earnings growth, high short-interest names, and positive sector ETFs.

Here are today’s readings.

Yesterday, we witnessed a continued short-term rally that brought us into positive territory. But, a combination of profit-taking at 1 p.m. and short-term overbought conditions pushed us back toward neutral territory.  

Dr. Declan Fallon’s blog suggests markets are experiencing swings and attempting to break higher and bring us back into net bullish territory.

Given the stream of economic data set to emerge in the next 48 hours and the start of earnings season, I’m not stunned to see this r…