Category: Fed

The Broken Fed

We talked on Friday that it was time to take a little off the table. After all, the S&P had shot 3.6% higher since a new bull market was confirmed on June 8. And right on cue, the selling started. The S&P 500 has been down every day since Friday. Yes, the pullback we’ve seen is partly because the AI hype was off the charts. And the rush to buy stocks after the “surprise” breakout for stocks at new highs had a roll to play too…

Fashionably Late to the Party

It sure seems like Wall Street and the financial media don’t want you to make any money in the stock market. I don’t know how else to explain the steady drumbeat of recession predictions, AI stock bubble declarations, and interest rate/inflation hawkishness…

Mistakes Will Be Made

the Fed hiked interest rates yet again on Wednesday. I actually set my alarm for 2 pm ET so I could see what happened. The Fed delivered a 25 basis point hike, as expected. And that hike took the Fed Funds rate (the interest rate the Fed charges banks to borrow from the Fed) to the 4.75%-5% range.

Powell’s Silicon Valley Prayer

We have reached the point of the Fed’s rate hike campaign where things are starting to break. Yesterday it was the Silicon Valley Bank (NASDAQ: SIVB) that “broke” – account holders pulling their money out of the bank to the point that the bank said it needed $2.5 billion in cash right away to stay afloat.

Today’s Trading Plan March 8, 2023

I turned the TV on just after 10 am yesterday to watch Fed Chair Powell’s annual appearance before the Senate yesterday. It was a shameless display of self-serving Senators grandstanding to reinforce the entrenched beliefs of the various constituents that voted them into their lavish positions

EVs, China, and The Fed

I recommended electric truck maker Rivian (NASDAQ: RIVN) back in early January, shares were trading $16.50 to $17.50. Rivian has four things going for it: good truck, plenty of cash, long-term deal with Amazon and an expected 200% jump on revenue for fiscal 2023.

Great Expectations

As you are no doubt well aware of by now, I look at the stock market in terms of “windows of opportunity” for trading purposes. It is often said that the stock market is a discounting mechanism. That is to say, investors and traders try to account for as many variables as possible, assess what that means for the future, and then apply all that to stock prices.

Coming up Roses

As of yesterday, pretty much everything we’ve been talking about over the last month blossomed. We were looking for the S&P 500 to take a run at 4100. It did even better, closing yesterday at 4179. We were looking for Amazon (NASDAQ: AMZN) to make a convincing move above $100 that would carry it up to $110. Amazon finished yesterday at $112.91.

Goodbye, 2022!

I expect I’m not the only one ready to close the book on 2022. Funny how a 20% drop for the S&P 500 leaves a bitter taste in your mouth… And I gotta say, the fact that stocks will finish in the red today, the final trading day of 2022, seems like a fitting tribute to a lost year for investors.