Don't Fight The Fed?

Good morning. Premarket futures have consistently been in the red this morning as oil prices make a move back to $50 per barrel. In addition, April durable orders, which tracks the selling of big-ticket items meant to last three years or more, rose +1.9% which was above economists' forecasts which expected a +1.3% increase. A big rebound in transportation orders (up +8.2%) and orders for computers (up +15.8%) were the two main highlights.

Following yesterday's minutes, I believe the market is somewhat confused on what to wish for in economic data. Do we hope to see weaker economic reports in order to have any measure of confidence the Fed is going to be done sooner than anticipated or do we want to see economic strength even in the face of higher interest rates in this ever-present goldilocks economy? Either way, we know now the Fed remains committed to raising rates, and while debate continues over what affect higher rates will have on the economy, the tried and true rule that you shouldn't fight the Fed is still applicable, even in this new era.

While it was impressive that the bulls were able to take the news in stride yesterday, higher stock prices and firmer charts have a way of letting the masses ignore the headlines. As we head into Memorial holiday, the rank and file will be heading off to the Hamptons, which should make for a choppy & volatile tape.