Friends

 

Stocks spent the first half of the trading session getting all excited about the Fed statement that was to be released at 1:00 our time. By gametime the Dow was sporting a nice 300 plus point gain and Nasdaq was up well over 2%. By the time Chair Powell was done with his Q&A session the Dow was down more than 300 points. Yet another wild intraday reversal. Basically, the Fed Chair continued his hawkish tone and that should not be a surprise to market participants. The Fed is ending QE, then they will begin to raise the Fed Funds rate, and finally they will reduce their bloated balance sheet. They have laid it out for market participants and now it’s up to us to determine what that means for our portfolios. But keep in mind that in January 2020 the Fed Funds rate was 2%-2.25%. The economy was in good shape and markets were strong. The Fed Chair “confirms” that the economy is stronger now than in 2020. With the inflation numbers we have at the moment, is moving back towards 2% Fed Funds really that drastic a move?

 

Anyway, by the close the Dow Jones Industrial Average was down 129 points to finish the day at 34,168. The S&P 500 was down 6 points to close at 4,349. The Nasdaq Composite Index was up 2 points to close at 13,542. Gold was down $37 to trade at $1,815 per ounce, while oil was up $.93 to trade at $86.53 per barrel WTI.

 

Have a nice evening everyone.

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