You might be wondering...

Prospero.Ai 7/11/24 Trading Letter

Q from Discord: Why does better than expected inflation data, leading to a higher chance of rate reductions - something the market has been desiring for months - leading to declines today? Especially as the pre market was up directly up after the news? Confused!

A: Buy on the rumor sell on the news. The market had been betting on big Tech / AI because that is the only thing people had confidence in but with inflation data where it is we are seeing people take profits as well as moving into Sectors like Real Estate and beat up Consumer Discretionary stocks: See Wendy's. Because they now see comparative value there with economic circumstances lowering pressure on consumer spendnig.

We have a familiar strategy below…