Friends
Stocks tumbled again today. Let’s discuss. The markets were in disarray before the opening bell as an article in the Financial Times referenced Moderna’s CEO discussing the possibility that their vaccine may not be as effective against the Omicron variant. Stocks opened down several hundred Dow points continuing the volatility that started last Friday. Then in a Q&A before Congress, Fed Chair Powell dropped a couple of bombshells. First he admitted that the Fed’s “transitory” description for inflation should no longer be considered accurate (if it was ever accurate at all), then declared that the economy is great and that the taper of asset purchases will likely begin sooner than previously indicated. A rather hawkish declaration by the Fed Chair. One might conclude that once Mr. Powell got renominated for his position by the President, he now feels free to express a slightly different viewpoint. But I digress. It is curious that now, just when news of a new Covid variant is dominating the headlines, the Fed Chair decided to add fuel to the fire. But once again, I digress.
As for today’s damage, by the close the Dow Jones Industrial Average was down 652 points to finish the day at 34,483. The S&P 500 was down 88 points to close at 4,567. The Nasdaq Composite Index was down 245 points to close at 15,537. Gold was down $10 to trade at $1,774 per ounce, while oil was down $3.07 to trade at $66.88 per barrel WTI.
Bonds also had an interesting day with the long end rallying (rates falling) while the short end sold off (rates rising). Remember, pundits had the 10 year Treasury note reaching 2% by year end just as recently as early last week. Today the 10 year note traded at 1.43%. Speaking of flight to quality, the shares of Apple appear to be where market participants feel safe as the blue chip name was up 2% for the day while most everything else was tumbling. As mentioned yesterday, we are in the midst of a volatility spike brought on by some concerning headlines. We’ll keep you posted as the week continues.
Have a nice evening everyone.
