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Ross Givens

Stock Trader & Educator

Inflation and the Debt Ceiling (Market Update from Charles Green)

Charles Green here, Senior Market Analyst here at Traders Agency.

Here’s today Market Pulse 360.

Market Pulse 360 for May 1, 2023

As expected, we are grinding higher and bumping up against resistance at NASDAQ 12,200 and well above the 200-day moving average since we bounced off NASDAQ 11,000 and formed a reverse-head-and- shoulders pattern mid-March.

This morning, the CPI YoY declined to 4.9%, which is now in decline every month since the peak in inflation at 9.1% in June 2022. The Fed Funds rate (5%) is now above the inflation rate, a significant benchmark for balance between inflation forces and economic growth.

This gives the Fed leverage in a definitive pause in rate increases, which I think he already signaled with the change in language “if necessary” in the last Fed meeting on May 3rd. Today’s CPI makes it unnecessary to continue to raise interest rates.

The strong areas of the CPI continue to be housing (30% of the CPI), wages and food. However, all three of these data have shown moderation, but housing and wage growth are a function of shortages, which will take some time to remedy. Markets liked the CPI report and futures are up strongly this morning.

Noise continues to filter into the market with talk of the default on our debt if the limit is not raised by June 1. I’ve heard this every time there is a necessity for Congress to raise the debt limit to pay current bills owed by the US government. It’s just posturing and theater. The debt limit will be raised.

The other chatter is about the declining dominance of the dollar. I already discussed this issue in my last Market Pulse, which is a separate issue from a declining value of the dollar, which is positive for the economy and markets, making international corporations more profitable and exports cheaper.

The bottom line: we are in good shape on all fronts and the market will continue to grind higher, albeit with volatility.

Positioning in high quality stocks, which have led the market this year, will be a strategy to mute the noise and maximize opportunities going forward.

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A Bit More About Me

My specialty is understanding financial markets and the drivers that influence longer-term direction. I’ve been an active trader focusing primarily on stocks for over 20 years.

I’ve also:

  • Been an adjunct finance professor for nearly 20 years
  • Worked as a financial consultant with Merrill Lynch managing millions of dollars 
  • Earned a Master of Science Degree in International Business and Finance from Georgetown University and a Bachelor in Arts Degree in International Studies from George Mason University.
  • Spent 14 years as a Marine (I enlisted at age 17) traveling all around the world

My education, work and life experience gives me a broad view of the world, financial markets, and life in general that informs my trading and investment decisions. 

My passion is helping others to take advantage of the best market opportunities to achieve their financial goals.  

This gives me the greatest satisfaction, and it’s the reason why I continue to teach in the classroom and outside of it today with every activity in which I engage. I believe that I succeed only if clients succeed.  

I am a very unlikely success story. And this is only because I believe that anything is possible with the right knowledge, focus, and winning mentality! When you have that, success is just a matter of time.  

Charles Green
Senior Market Analyst, Traders Agency

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