In New York morning trade, we are looking at the major US stock averages opening higher, and we are looking at oil trading in a tight range.
Well joining me to weigh in on what's moving markets this morning is Eric Criscuolo, a market strategist at the New York Stock Exchange.
Eric, good morning.
Thank you so much for joining me.
Good morning, Remy.
Always a pleasure.
Well, we're here in New York.
We're coming off the next.
Yesterday and of course we are looking at the markets in positive territory.
We got inflation figures this week, but of course all eyes on the SpaceX IPO tomorrow.
So give us your take on what's moving markets.
Yes, so obviously this week the inflation data was kind of front and center.
We had CPI and PPI, CPI yesterday, PPI today, and It's basically showing us what we kind of knew already that inflation is elevated, it's high, it's relatively stable, right?
It's not moving really, it's not moving higher.
It's not really coming down either, so it's kind of stuck in the steady state.
The Fed wants to move this thing lower.
They want it more closer to 2%.
That's their target rate.
And so that's why you see kind of Treasuries yields remain high.
We're looking at, you know, no cuts to maybe a slight, you know, half a, half a rate hike in the future depending on how the rates are pricing it now.
So you know the Fed is still going to want to bring this number down, and it's still it's a very sticky inflation print, but it's not getting worse as of now.
Yes, and you bring up an important point because whether we're talking about monetary policy in the US or overseas earlier this morning we saw the ECB raise rates as well, and it is tied to oil and the situation in the Middle East regarding the Strait of Hor moves and we are keeping our eyes on geopolitics again this morning.
But here in the US, the markets are paying attention to the SpaceX IPO, all the details surrounding that public offering.
So what are your Expectations as we head into tomorrow.
Yes, a lot of talk around it, obviously, and you know we've seen coming leading into this into the IPO tech in general has sold off.
The AI trade has kind of come off the boil, so we saw, we have been seeing rotations out of those high flying names, you know, into some of the lagging names, maybe, you know, some healthcare names, you know, consumer staples, some of the Some of the sectors, some of the themes that have kind of been left behind in the AI froth, we're seeing some of that rotation into those names.
So tech is kind of pulling back.
You know some of the names are holding steady, but mostly pulling back.
And so the big question is, will the rotation continue?
How much of that weakness was people getting ready for a big IPO, you know, increasing their balance?
Sheets so they can take part in the IPO.
How much of it was that versus how much of it was just, I've made a lot of money on this trade.
I'm just coming out of it, you know, just general rotation that remains to be seen and how the market responds to these big IPOs over the next 3 to 6 months also remains to be seen.
I'd love to tell you exactly how it's going to play out.
I just don't know.
Yes, we don't have a crystal ball.
We do not.
So finally, before I let you go, you're talking about this broadening of The rally outside of energy, outside of tech, is that a good thing or not?
Well, yes, because normally you know one sector, even if it's tech, it can only carry things so long before things get heavy, valuations get stretched, investors look at what they've made over the years in a certain name, and then go, can this go even higher?
I don't know.
That skepticism kind of plays in.
So yes, you would like to see.
Kind of equity flows go out of those names into other names and kind of continue to rally higher.
So that is kind of a lifeblood or a recycling of of capital and so that kind of helps push everything higher on a consistent basis.
But you know rips like we saw in memory names in some of those AI trades, I mean those can go on for far longer than you could possibly ever have thought.
But now it looks like it's kind of needing to catch its breath a little, so yes, I would think that maybe the next move higher is when those other sectors maybe get some flow back into them to push them higher and kind of take things to the next level, but also.
You know, it's not out of the out of the realm of possibility that we could see a little sell off here, but again it remains to be seen.
Yes, we will have to wait and see.
Well, Eric, great having you here.
Thank you so much for joining us anytime, Remy.
Thank you.
Thank you.
