Major indexes reversed yesterday on higher volume following an initial reaction after the Fed policy announcement as the Fed held rates steady but indicated further interest rate increases are likely given that U.S. inflation is ticking higher. Should inflation accelerate, the Fed will become more aggressive about hiking rates. Meanwhile, economic stability continues to be called into question with regard to the deteriorating middle class at home and abroad. As Ray Dalio of Bridgewater astutely pointed out, 60% of those in the US are seriously struggling, while the divide between the haves and have-nots has never been greater. The top 1% now represent the bottom 90% of wealth. The global economy remains stuck despite near record levels of QE capital being printed. This will eventually force the Fed's hand to either reverse their rate hikes, potentially within the next year or two, or devalue the dollar. Other currencies would follow suit.
Futures are dropping sharply this morning with no news catalyst as the market follows through on yesterday's weak finish.
Focus List Notes:
With the indexes in a downtrend, long positions are not advised.
FTNT is expected to report earnings today after the close.
SQ reported earnings and failed to satisfy investors. The stock is gapping down this morning below its 10-dma and 20-dema after closing below the 50-dma yesterday.
Market Lab Report - Pre-Market Pulse for Thursday, April 3, 2018
| Published: | 3 May 2018 08:39 ET |
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