Hey y’all,
I lead a small weekly Bible Study in our office, and this morning we were talking about the story of Gideon (don’t worry, this is not going to turn into a sermon).
For those who don’t know, Gideon was a “hero” in the Old Testament, albeit a complicated one, who answered God’s call reluctantly and helped Israel defeat the Midianites.
But the real thing Gideon is known for is constantly asking for divine reassurance about his mission. He asks God for signs repeatedly to “prove” that he’s actually chosen, actually called, actually capable of beating the Midianites, etc.
Basically, Gideon is the “Doubting Thomas” of the Old Testament.
I feel like the stock market is Gideon right now.
People are not convinced that the markets are actually healthy. They are continually looking for proof.
Two data points jumped out at me yesterday.
First of all, SPY daily trading volume dropped below 40 million shares, its lowest daily volume in over a month.
While I think this is just nervous anticipation of the Fed meeting on Wednesday, it’s worth noting that the last two times this has happened, it’s preceded a pretty hard selloff:
I think the more interesting point right now is that money is flooding into money market accounts at record levels.
Risk-free investments are extremely popular right now. They come with a very low rate of return, but at least they offer peace of mind.
How long is money going to stay on the sidelines?
What is the “sign of the fleece” (from Gideon’s story) that will convince investors that the market is safe again? Or, alternatively, that will finally drive a true bear market?
We could know as soon as Wednesday… but to be honest, I doubt it.
I’m expecting mixed signals from the Fed. No rate cuts, warnings about tariffs, but an olive branch that rate cuts may still come in the next few meetings.
But if Powell leans heavily one way or the other, it could be a catalyst for a major market move.
Pay close attention. Watch the trading volume today. See how investors are feeling.
You never know where they’ll get their next “sign” from.
To your prosperity,
Stephen Ground
Editor-in-Chief, ProsperityPub
P.S. Markets may be shaky, but one asset continues to rise. And Geof Smith has a genius way to play it!
