Wall Street Frontline｜Peter Tuchman: Clarity out of the Fed(3)

If there's any kind of a look, look what we saw in Dell yesterday, right? Dell had the slightest bit of disappointment. And the stock was not down 2 or 3 or 5 points. It was down 20%. So this market is not very forgiving. When everybody has had such a huge profitary run in all of these names, the market is up, trading at record highs. So there are very few stocks that are not up, right? So that when you have any inkling that there's something negative going on, they just sell it with abandon. It is not a very forgiving stock market. If you hit it, they love you. If you miss on anything, they're going to sell the living heck out of it. So I think the market tells us that June, we're at the crossroads here.

Monday will be the first trading day in June. Some fresh money will come into the market, but clarity out of the Fed will be very important as to what their plan is going forward. I believe there's a 70% chance of a cut in September that may be already negotiable. I don't know about that. But, you know, we have the election. We have Mr. Trump being convicted. We've got all these moving parts. Will that have an effect on it? Probably not. And elections overall don't really affect the stock market at all and rarely ever have. But I think we're at a crossroads. So I don't know what the next move is. We're either going to hit up against some technical resistance and the market's going to consolidate for a little bit, or we're going to build another formal rally and go higher.

Wall Street Frontline: So recently the market has been very volatile, right? The volatility is kind of high. So what has caused this kind of volatility?

Peter Tuchman: Well, the volatility is coming from all these moving parts. A lot of it came from the Fed. The Fed has not given us a clear message for months now. We came into the year with seven cuts and then we got cut down. Then the economic data showed us that we were not there. And then Jay Powell said,  “I'm not going to pay attention to that negative PCI and CPI number”. And then, you know, the other governors told us one thing and he told us another thing. And then you had these mixed messages and everybody's giving news conferences in the middle of the week. 

So the market was skittish around the whole interest rate story. And then the economic data that came out was disappointing. And so then you went from three cuts, two cuts, one cut. Then we said, oh, my God, we actually may not be able to support a cut right now at all. And so we actually even discussed for a few weeks that we may even have to bump it back up into a raise. So that kind of lack of transparency. Look, it's no blame on the Federal Reserve. Their decision-making is database. The data changes all the time.

So for me, the analogy I use is like if you wanted to lose weight and go on a diet and you wanted to lose 35 pounds, right? And you decided to do paleo and keto and all this other stuff. And you lose the first 30 pounds. It's very easy to lose. It's just water. But the last five pounds is very difficult to lose.

Wall Street Frontline: So it's like the last mile of inflation.

Peter Tuchman: Exactly. We went from 8.5% inflation to 3%. We made that. We did it well. The tools worked. But this last 1%, that trajectory. It's so hard to make it. We're not going to get there the way we got down the first 5%. It's going to take a little while, some patience. The market's got to marinate right here. So I think we're going to see consolidation, marination, all kinds of fun stuff.

出品：南方财经全媒体集团 

策划：于晓娜

统筹：向秀芳

记者：周蕊 

制作：段伊航（实习生）

设计：林军明 廖苑妮