Friends
It was more of the same today. Stocks tried to rally a couple of times and failed while a Fed official reiterated that the Fed is totally committed to squashing inflation. In every TV appearance or interview Fed officials continue to play the tough talk game hoping that the markets will continue to do the heavy lifting. The yield on a 2-year Treasury bill topped 4.3% today, while the Fed Funds rate was just recently moved to just above 3%. So, the market is out ahead of the Fed and the Fed is good with that. Stocks continue to fall, and the Fed is good with that too. Lower that wealth effect please.
As for today, by the close the Dow Jones Industrial Average was down 329 points to finish the day at 29,260. The S&P 500 was down 38 points to close at 3,655. The Nasdaq Composite Index was down 65 points to close at 10,802. Gold was down $24 to trade at $1,631 per ounce, while oil was down $1.96 to trade at $76.78 per barrel WTI.
The stock market isn’t the only thing the Fed is trying to affect. The payment on a $500,000 mortgage has moved from about $1600 a month to about $2600 a month in just one year. That is going to slow first time home buying and those attempting to move up the housing ladder. So, the Fed continues to attempt to achieve demand destruction and it appears that they are succeeding. Investors are caught in the crosshairs at the moment. The bulls can only point to the extreme negative sentiment at the moment. We could get a counter trend rally at any moment. We have seen a few already this year and they will likely continue to occur. But as we continue to say, ad nauseam, this is all going to take some time to play out. But play out it will.
Have a nice evening everyone.
