The markets were poised to head higher Friday after two days of bruising losses, with the Dow (^DJI) dropping a cringe-worthy 225 points Thursday. The losses were pegged to jobless claims and inflation data, stoking fears that the Fed will start to taper its monthly $85 billion bond-buying program this fall.
To get a more complete picture of what’s driving equity markets right now, we talked to Jeremy Hill, managing partner at TF Market Advisors, at a New York-based research, consulting, and asset management firm.
The market is “a little like a badger,” Hill tells The Daily Ticker, invoking his Wisconsin days growing up. “It’s a cute, fluffy animal. My kids want to play with it, but it’s tenacious; it’s got nails. It’s an aggressive market right now.”
Hill names a few factors in the recent sell-off that have brought the badger claws out. He says volumes are light and people are away. Right now, “when you try to get ahold of Wall Street people, the managing director levels are just not picking up their phones,” he quips.
Hill also says the markets are tired, echoing what Pimco CEO Mohamed El-Erian told The Daily Ticker Thursday.
“You have to remember we were up almost 20%,” he says. “With all the macro headwinds, in particular Fed taper talk, the market really needed to take a breather and it’s doing so.”
Looking ahead at catalysts that could drive the market higher or lower, Hill zeroes in on a “lot of negatives right now.” One of those catalysts is oil. Take a look at the accompanying video to see how it impacts economic growth and in what way an increase in prices can translate to an equity market headwind.
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