On Wednesday, Fed Chair Jay Powell shifted his messaging just enough to cancel the Grinch from stealing Christmas this year.\u00a0 In his prepared speech on Wednesday he made the following statements which eased market participants’ jittery sentiment over the past few days:<\/p>\n

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In the press conference Powell made two unexpected statements<\/span>:<\/p>\n

1. “I don’t want to over-tighten<\/span>.”\u00a0 Up until now, the Fed has consistently implied they would lean toward over-tightening.<\/p>\n

2) It’s “not appropriate to execute some ‘shock and awe’ strategy to crash the economy and clean up afterwards<\/span>.”\u00a0 They were on track to do this. It’s nice to see they are finally recognizing the impact of their aggressive tightening.<\/p>\n

The market abruptly rallied on the news led by China Tech, Biotech, U.S. Tech and Semiconductors.\u00a0 We’ve covered the opportunity in all of these unloved groups in recent weeks and this was the shift that caused a bid.\u00a0 We expect to see continued follow-through in fits and starts through year-end.\u00a0 Some data points to pay attention to moving forward:<\/p>\n

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Sentiment Trader:<\/p>\n

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One of the best strategists on the Street – Marko Kalanovic of JPM (who has been bullish all year) – literally threw in the towel and finally capitulated\/went bearish (exactly 1 hour before Powell spoke):<\/p>\n

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On Tuesday, I joined Mitch Hoch “Money Mitch” on Benzinga to discuss stock market end of year outlook (the best trades for 2023-2024), U.S. dollar, Emerging Markets, the Fed, Inflation, Tech, clearance sale, Black Friday, China, casinos, oil, Volker, rail strike, and “thumb suckers.”\u00a0 Thanks to Mitch and Zoltan Suranyi for having me on.\u00a0 Pay special attention to the commentary on Tech and Emerging Markets in this segment:<\/p>\n