ONE-TWENTY TWO: Trading Financial Markets
Exploring the poetry in financial markets for students of money and economy since the year 2000.
Stock Market Commentary: At mid-week, the stock market looked poised to put on a defiant display of buying power. However, multiple negative headlines proved too much to bear. Hawkish Fed-speak greased the skids on Thursday. Another hot inflation report and escalating tensions at the Ukrainian border sealed the deal for angst to rule the day. … Read more
There was a hopeful narrative going into the last week’s Federal Reserve meeting that Fed Chair Jerome Powell and company would emerge more dovish. The stock market’s sell-off this year could frighten the Fed into standing down from its earlier insistence about tightening monetary policy. Not only did Powell stride into the press conference unbowed … Read more
Stock Market Commentary: The stock market is expressing its disappointment with the Federal Reserve’s plans to tighten monetary policy. The Fed will have the backdrop of a sharp market sell-off when it meets this week to further execute on those plans. Like a forlorn partner, stocks sent a wistful love note to the Fed asking … Read more
Stock Market Commentary The stock market survived a choppy week. The churn almost looked like stabilization after a disappointing start to the new year. However, the attempt to absorb the news of a hawkish Fed is taking its toll in the form of toppiness. With each passing day I get more and more wary about … Read more
Stock Market Commentary The strong end to 2021 mattered for just one day so far in 2022. Presumably fresh passive investments helped create a broad surge on the first day of the year. Wednesday’s release of the minutes from the Federal Reserve’s December meeting changed everything. Apparently, the Fed talk sounded a lot more hawkish … Read more
Stock Market Commentary In last week’s decision on monetary policy, Federal Reserve Chair Jerome Powell directly and fully acknowledged inflationary pressures in the economy. Perhaps lost in the inflation buzz was Powell’s quick commentary on financial stability during the Q&A session: “…asset valuations are somewhat elevated, I would say.” Of course, various folks in the … Read more
Stock Market Commentary The stock market wilted toward oversold territory ahead of the Federal Reserve’s latest pronouncements on monetary policy. However, the relief from hearing exactly what everyone expected was so large that the S&P 500 (SPY) gained 1.6% and almost hit a new all-time high. The move fooled a lot of people (see below). … Read more
Stock Market Commentary Federal Reserve Chairman Jay Powell, aka “J-Pow”, finally decided the time has come to drop the descriptor “transitory” from America’s current experience with inflation (see the 37:00 mark in the video below). J-Pow even acknowledged that “it is therefore appropriate…to consider wrapping up the taper of asset purchases…perhaps a few months sooner” … Read more
Stock Market Commentary Say whatever you want, Jerome (Jay) Powell, the chair of the Federal Reserve, affectionately known as J-Pow, has become a master orchestrator of the stock market. Other Federal Reserve Board members peppered the airwaves with hawkish talk about tapering and inflation in the days preceding Powell’s address at this year’s Jackson Hole, … Read more
The Stock Market’s Value The U.S. Federal Reserve’s dual mandate is stable prices and maximum employment. Yet, when the Fed sets monetary policy, the most direct and immediate impact plays out in financial markets. When the Fed eases monetary policy, the dominant theme the last 20 years, asset prices invariably increase. Indeed, over the years … Read more