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  • Services PMI at 55.2%; January 2023 Services ISM Report On Business

    From prnewswire.com

    Economic activity in the services sector grew in January after contracting in December following 30 consecutive months of growth, with the Services PMI® registering 55.2 percent, say the nation's purchasing and supply executives in the latest Services ISM® Report On Business®. The report was issued today by Anthony Nieves, CPSM, C.P.M., A.P.P., CFPM, Chair of the Institute for Supply Management® (ISM®) Services Business Survey Committee: "In January, the Services PMI® registered 55.2 percent, 6 percentage points higher than December's seasonally adjusted reading of 49.2 percent. The composite index grew in ... (full story)

I've said it before and I'll reiterate:

DON'T FIGHT THE FED!!!
...because you never know - until you do!
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We all learned in HS Economics that inflation is directly porportional to money supply! Fight it properly Fed! Why is the banks reserve requirement at 0%?
Today's NFP and the Services ISM blew everybody away. No analysts were anywhere close forecasting both numbers. This goes against the market expectation and adds uncertainty to the argument that Fed will pivot this year. All those selling USD is getting burnt and it will be prudent to cut their losses and reassess their USD strategy in light of todays actual numbers.
Quoting TraderHS
Today's NFP and the Services ISM blew everybody away. No analysts were anywhere close forecasting both numbers. This goes against the market expectation and adds uncertainty to the argument that Fed will pivot this year. All those selling USD is getting burnt and it will be prudent to cut their losses and reassess their USD strategy in light of todays actual numbers.
Whoever said they would pivot? The markets have been unequivocally disconnected for a while now. They literally have been reiterating for the past few weeks and months that we have a long way to go. The markets just seem to be at a disconnect with the FED, a divergence if you will.

Inflation was always going to be a tough battle to fight. Look at your cost of your regular household items. I could start trading eggs for currency at this point.
The solution is (x).
Why EURUSD is up now?
Please big boy buy USD now so that EURUSD will fall
And stocks are pumping lol
I could love to learn this fundamentals
Quoting Momofrmnyc
{quote} ...The markets have been unequivocally disconnected for a while now. They literally have been reiterating for the past few weeks and months that we have a long way to go. The markets just seem to be at a disconnect with the FED, a divergence if you will. ...
I agree, and as a trader, I am continually trying to key in on two separate things.

1. Is this emotional?
2. Is the market's reaction based on substance, and what is THAT substance?

I'd love to engage folks on THIS.

I believe this is fundamental to being able to make better judgements short and long term. I had a great session this morning... but honestly, I was surprised the FED didn't go 50 Basis points, and my gamble didnt pay off that session... so.

Discuss. plz.
Quoting Giucca
And stocks are pumping lol
yeah, they are rocketing up. I am not great at this, but is this not meant to be "bad news" for the stock market? Confused.
Quoting Xoraster
{quote} I agree, and as a trader, I am continually trying to key in on two separate things. 1. Is this emotional? 2. Is the market's reaction based on substance, and what is THAT substance? I'd love to engage folks on THIS. I believe this is fundamental to being able to make better judgements short and long term. I had a great session this morning... but honestly, I was surprised the FED didn't go 50 Basis points, and my gamble didnt pay off that session... so. Discuss. plz.
The market and FED have been disconnected for a while in my opinion. We are at a time where we are trying to figure out how well the FEDs fight on inflation has been thus far. I believe in my opinion the recent data coming out has the markets believing the FED will pivot from rate hikes and even a potential rate cut this year. The FED has been saying while the data has been decent we still haven't felt all the effects of a rate hike and inflationary pressures still exist. Which i take that as we can still hike or we will keep it on the upper rate for longer until we are confident things are moving in our favor.

That's why in my opinion there's a divergence between the markets and FED as far as which direction to continue/proceed.

Here's the thing it's my opinion and another 1000 people could draw up other analysis in 100 different directions. You're asking the right questions in gauging how others view and look upon this.

Long term I'd be looking at FEDS verbiage on future projections/rate hikes or how long rates shall stay in the upper bound.

We all get clues from different mediums and dissect them differently. I hope i could help in someway.
The solution is (x).
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Quoting Niru
{quote} yeah, they are rocketing up. I am not great at this, but is this not meant to be "bad news" for the stock market? Confused.
I also understand that it should be down. Does anyone know if there is any logic in this rise in the stock market?
My take on it is:

This FED has absolutely no Credibility with Wall Street.

1. Fact. right? The market was saying, hey FED, wft, inflation is here, more than 12 months ago pre Jan 2022. right?
Conclusion: The Market never took the FED's actions seriously, because they dragged their feet, and it got worse than it needed to. etc. yada yada yada.

2. how many rate hikes have we had that the 'word on the street' was it's just not enough. right?

3. AND The market's been waiting and saying for months, that the bottom is WHEN the FED pulls back on the rate squeeze, and it has. from 75 > 50 > 25.

Game over.

Having said that, does anyone believe in 'transient' 'soft landings'?

unemployment is below 4% which is where it should be.
but, tech is laying folks off now, and it's likely to continue.. .cause their debt leveraged business models.
however, the stimulus which somehow keeps moving $ into the economy is still spiking inflation in combination with the fact that systems have broken down due to COVID negligence or lack of workers to maintain them. etc. whatever excuse you like. supply chains are still operating lower than pre COVID capacities. etc.

So, what IS the market so excited about?

They're acting rationally? or emotionally?
Or are the acting on the fact they KNOW the FED is being 'emotionally political' and gambling that they can get a good year of returns out of this insufficent rate 'pause' before the FED is forced to take action which will be worse than it's current course?

*shrug* lmk. there's a ton more factors. QE - is it being done? does it impact the rates?
Govt Spending? will it ever get balanced? etc yada yada

But What FXSport says is still the true cliche

Quoting fxsport
I've said it before and I'll reiterate: DON'T FIGHT THE FED!!!
and based on Powell's umpteenth tepid response to inflationary pressures... I'd say that many in the market feel like they are NOT fighting the fed... the FED is fighting reality, so we're just gonna take some short term profits before you realize your mistake. .
Quoting Xoraster
My take on it is: This FED has absolutely no Credibility with Wall Street. 1. Fact. right? The market was saying, hey FED, wft, inflation is here, more than 12 months ago pre Jan 2022. right? Conclusion: The Market never took the FED's actions seriously, because they dragged their feet, and it got worse than it needed to. etc. yada yada yada. 2. how many rate hikes have we had that the 'word on the street' was it's just not enough. right? 3. AND The market's been waiting and saying for months, that the bottom is WHEN the FED pulls back on the rate...
Doesn't matter. Don't ever, ever fight the Fed.
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  • Story Stats
  • Posted: Feb 3, 2023 10:00am
  • Submitted by:
     Newsstand
    Category: High Impact Breaking News
    Comments: 14  /  Views: 7,036
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