It looked promising in the morning as the stocks bounced higher possibly creating a bottoming process. But then it was slowly bleeding and erasing all morning gains. The investors continue to act as if FED is going to increase the rates to 10% or some similar number. Not the case. At the most, we will see a rise of 1%, maybe 1.5% this year. And with inflation expected to drop back to 2.5%, there will be no more hikes. The US economy is not that good to sustain such pressure. Raising rates higher will crash it.
The stock market paired all gains. What could have caused this bleed is unclear as trading was not overly volatile. VIX is actually down 1.8% on a down day. It could be several catalysts such as unemployment claims, Peloton crashing on a report of halting production on low demand, or other things investors perceive as bad.
From the technical perspective, this is not good as this will prompt more selling on Friday.
After the bell, companies such as Netflix will be reporting earnings. Will the earnings season help this market? So far, investors seem to be ignoring earnings and the market is stuck on FED and its tightening.
Leave a Reply