The Patience Game

Here's how I'm playing this market. Detailed analysis below...

Stocks finished sharply lower yesterday (SPX -2.24%, NDX -3.04%, RTY -0.9%) on a combination of:

(1) Semis under pressure (NVDA finished -7% on new export curbs to China, which the company said will lead to a $5.5B write-down + ASML -5% on an earnings miss and lighter guide); and

(2) Powell’s hawkish afternoon commentary, with his lasting remark rattling markets: “For the time being, we are well positioned to wait for greater clarity before considering any adjustment to our policy stance.” Translation - don’t expect any rate cuts until the data deteriorates.

This should come as no surprise to Marlin Capital readers, as the Fed is data dependent and they do not cut rates preemptively. I wrote about this on Monday in “Choppy Waters”:

“The Fed can only cut rates once the hard data allows them to, and we are not at that point yet.”