Major averages sold off again yesterday on higher volume with the S&P 500 closing below its 50-day moving average. Some hawkish commentary sparked by the higher than expected CPI, the largest increase in three years, pushed up the odds of a rate hike at the next Fed meeting. Two Federal Reserve presidents recently said at least two interest-rate increases may be needed this year.
Under the hood, the market is running on 2 cylinders but the QE fumes which remain steady attempt to push this flopping fish up the hill. The back-and-forth action with the market continuing to flirt with highs since 2015 is like a dysfunctional salmon trying to swim upstream.
Minutes from the Federal Reserve’s last policy meeting are due today at 2 pm ET. Recent members have expressed hawkish tendencies though odds of a rate hike show Fed futures at low levels. It will not be until the meeting in November that the odds increase beyond 50%.
A weekly reading on U.S. oil supplies is due at 10:30 am ET. Given the correlation between stocks and oil, this has the potential to move markets as a recent reading pushed markets temporarily higher.
This information is provided by MoKa Investors, LLC DBA Virtue of Selfish Investing (VoSI) is issued solely for informational purposes and does not constitute an offer to sell or a solicitation of an offer to buy securities. Information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of available data. VoSI reports are intended to alert VoSI members to technical developments in certain securities that may or may not be actionable, only, and are not intended as recommendations. Past performance is not a guarantee, nor is it necessarily indicative, of future results. Opinions expressed herein are statements of our judgment as of the publication date and are subject to change without notice. Entities including but not limited to VoSI, its members, officers, directors, employees, customers, agents, and affiliates may have a position, long or short, in the securities referred to herein, and/or other related securities, and may increase or decrease such position or take a contra position. Additional information is available upon written request. This publication is for clients of Virtue of Selfish Investing. Reproduction without written permission is strictly prohibited and will be prosecuted to the full extent of the law. ©2022 MoKa Investors, LLC DBA Virtue of Selfish Investing. All rights reserved.