Stock market rally collapses as Fed Powell hints at slower increases, but peak rate hike

Overnight, Dow futures were slightly higher, along with S&P 500 futures and Nasdaq futures. The stock market rally suffered heavy losses on Wednesday after the Federal Reserve’s meeting.




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Major indices rebounded after the Fed raised rates aggressively again but signaled that It can start to slow the pace of price increases. However, Federal Reserve Chairman Jerome Powell suggested that prices will peak at a higher level than previously expected.

Investors should be careful as the stock market rally takes a hit. But it’s not over yet.

Albemarle (ALB), CF . Industries (CF), Qualcomm (QCOM), Sarepta treatments (SRPT), fortinet (FTNT), Robinhood Markets (Hood), world wrestling entertainment (WWE) And the beauty elf (dwarf) reported after closing. There have been many losers with ELF stock and both of Robinhood are dividend winners.

before opening on thursday, Cheniere Energy (liquefied natural gas) And the Quanta Services (PWR) Report. Both Cheniere and PWR stocks are trading near shallow buying points cup with handle the rules.

LNG stocks running IBD Leaderboard, while ALB, Sarepta Therapeutics and CF Industries stocks are on the watch leaderboard. CF and SRPT stocks are in defect 50.

The Fed is focusing on raising rates more slowly

As expected, the Federal Reserve raised interest rates by 75 basis points for the fourth consecutive meeting, to a range of 3.75%-4%.

The Fed hinted at a slower pace of rate hikes, citing the delayed effect of “cumulative” tightening this year.

“In determining the pace of future increases in the target range, the committee will take into account the cumulative tightening of monetary policy, the delays with which monetary policy affects economic activity and inflation, and economic and financial developments,” according to the Federal Reserve publication. Meeting statement.

Powell sees peak rate rising

Federal Reserve Chairman Jerome Powell, speaking shortly after the Fed meeting was announced, agreed that policymakers may slow down raising interest rates as soon as December. He said the “speed” of interest rate hikes is less important now than it will end up being.

But Powell indicated that the fed funds rate could end up higher than the Fed’s September forecast of 4.6%. That indicates a federal funds rate of 4.75%-5%.

Markets now anticipate a 57% chance of a December rate hike of 50 basis points, up slightly from just over 50% on Tuesday. This will push the fed funds rate to 4.25%-4.5%. Forecasts currently favor at least 50 basis points at the February meeting, to 4.75%-5%.

Friday’s jobs report will be important to determine interest rate hike expectations. The November jobs report, as well as two CPI reports, will also be released before the next rate hike decision on December 14.

Dow jones futures contracts today

Dow futures rose 0.2% against fair value. S&P 500 futures rose 0.2% and Nasdaq 100 futures rose 0.3%.

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Crude oil futures fell slightly.

China’s Caixin Private Sector Services PMI fell 0.9 points in October to 48.4, falling further below the break-even point level of 50. China’s manufacturing and other services reports also pointed to a contraction last month.

Remember to work overnight in Dow Jones futures contracts and elsewhere that does not necessarily translate into actual circulation in the next regular session Stock market session.


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stock market rise

The stock market initially rose on the back of a Fed rate hike and dovish policy statement, then fell sharply as Powell signaled a higher end point for the fed funds rate.

The Dow Jones Industrial Average is down 1.55% on Wednesday stock market trading. The S&P 500 fell 2.5%. The Nasdaq Composite 0ff sold 3.4%. Small-scale Russell 2000 slipped 3.3%.

The 10-year Treasury yield rose 1 basis point to 4.06%, rebounding from an intraday low of 3.98% shortly after the Fed meeting. The US dollar also bounced higher.

US crude oil prices rose 1.8 percent to $90 a barrel. Natural gas futures rose 9.7%, continuing this week the trend of massive daily moves.

ETFs

between the Best ETFsThe Innovator IBD 50 ETF (fifty) fell 2.1%, while the IBD Breakout Opportunities ETF innovatorfit) give up 2%. iShares Expanded Technology and Software Fund (ETF)IGV) decreased by 4.6%. VanEck Vectors Semiconductor Corporation (SMH) slipped 2.9%, and QCOM stock was owned by prominent SMH.

SPDR S&P Metals & Mining ETFs (XME(Down by 6.1% and the US Global Infrastructure Development Fund X)cradle) 3.1%. US Global Gates Foundation (ETF)Planes) down 2.9%. SPDR S&P Homebuilders ETF (XHB) sank 3.8%. SPDR Specific Energy Fund (SPDR ETF)XLE) is down 2.4% and the Financial Select SPDR ETF (XLF) lost 1.3%. SPDR Healthcare Sector Selection Fund (XLV) decreased by 1.7%.

Shares reflect more speculative stories, the ARK Innovation ETF (see you) is down 4.9% and the ARK Genomics ETF (ARKG) decreased by 3.4%.


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earnings

Albemarle’s earnings were high, and they easily beat, but the booming lithium giant’s revenue slumped.

ALB stock fell 4% in overnight trading. Shares fell 4.5% to 266.52 on Wednesday, back below the 50-day line. Albemarle’s stock sank partially after that Levent (LTHMMissed sales late Tuesday. ALB stock contains 308.34 buy pointto me MarketSmith Analysis. But a move above Thursday’s high of 287.88 may provide an early entry.

Loss of CF profits and revenue. The fertilizer giant announced a $3 billion buyback, but CF stock was down 5% after hours. Shares of the fertilizer giant fell 4.3 percent on Wednesday to 103.17, crossing the 50-day line. CF stock is basically at 119.70 buy points.

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Fortinet Earnings Top Views The cybersecurity firm drew a slight uptick in the fourth quarter. But third-quarter billing was in line while billing guidance was light. FTNT stock is down 11% in an extended move, indicating a test of bear market bottoms. The shares actually fell 5.65% to 53.23 on Wednesday, after once again hitting resistance at the 200 line on Tuesday.

Sarepta reported a bigger loss than expected while also missing sales. SERP shares fell 3.5 percent overnight. Shares fell 0.6% to 113.42 on Wednesday, holding above 50 days. Sarepta stock contains 120.33 flat base point purchase.

Qualcomm Earnings It was in line while revenue just missed its fiscal fourth-quarter hits. But the wireless chip giant fell sharply in the current first quarter, as it saw more phone weakness. QCOM stock tumbled about 8% in extended trading. Shares fell 4.1 percent on Wednesday to 112.50. Qualcomm’s stock is down from its October bear market low but below the 50-day sliding streak.

Elf’s earnings easily beat the views while also topping the sales. ELF stock jumped 11% after hours, and is back near record highs. Shares of the affordable cosmetics company lost 4.7% Wednesday to 41.66.

He missed WWE’s earnings slightly while outpacing revenue. WWE said it has concluded an investigation into alleged misconduct by founder and former CEO Vince McMahon. Stocks have not been active late in the business. WWE stock fell 1.5% to 77.54 Wednesday, still in the range of 75.33 buying points from shallow cup base.

Robinhood reported a lower-than-expected loss while revenue fell. The EBITDA positive trading application was revised in the third quarter and lowered its guidance for full-year operating costs. HOOD stock rose 2.6% to 17.70 overnight, indicating a return to around 11.73 buying points from a bottom base. Shares fell 4.4% Wednesday to 11.40, slipping outside the buying zone.


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Market Rise Analysis

The stock market rally had a surprising effect on Wednesday. After rising to session highs on the back of a dovish Fed meeting policy statement, stocks fell to session lows on the back of Powell’s hawkish comments.

Investors were betting the Fed would raise rates less, but implicitly expected a rapid transition from slower rate increases to an outright pause. Fed Chairman Powell indicated that the latter is out of reach.

It can be said that Powell and his colleagues at the Federal Reserve have achieved three goals: 1. Indicate a slower rate of interest rate hikes. 2. Still looks tough on inflation. 3. Do not launch a big rush in the market, which may undermine their fight against inflation.

The Nasdaq Composite Index, which was hitting resistance near the 50-day line, fell below the 21-day line. It is worth noting that the Nasdaq closed below its lowest level on October 21 Follow-up day. This is a bearish signal.

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Other key indicators didn’t cut their FTD lows, but they still took a hit.

The S&P 500 fell below the 50-day line and closed below the 21-day line. The Dow Jones fell below the 200-day line. The small Russell 2000 missile, which had been approaching 200 days, was almost reduced to 50 days.

For now, the stock market rally has been hit. The Nasdaq, which was late to climb, appears to be the weakest. Megacap technologies and cloud software names struggle hard. On the other extreme, it could be argued that the Dow was on the verge of a pullback.

What matters now is how the major indices and the leading stocks respond.

The market movement may continue on Thursday. Stocks and Treasury yields often have significant second-day reactions to Fed meetings, often reversing course from the initial move.

Then on Friday, the jobs report looms large.


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What are you doing now

There was reason to be cautious ahead of the Fed meeting, and it turned out to be justified. Investors may have vouched for the sale of some shares, either to reduce the overall exposure or simply to take profits or reduce losses in individual names.

Even apart from the Fed’s rate hike plans and the upcoming jobs report, it’s the middle of earnings season. Several stocks that were in or near buying territory sold out on earnings on Wednesday, including Devon Energy (DVN), Levent (LTHM), ATI (ATI) And the Paycom Software (PAYC).

Investors may want to review their holdings to see if any more deals should be cut, due to technical measures, looming earnings or overall portfolio management.

The stock market may remain choppy with Friday’s jobs report.

But this is still a definite upside in the market. Many stocks remain close to buying territory despite Wednesday’s losses. So, get your watchlists ready and keep sharing.

Read The Big Picture Every day to keep up with the trend of the market, stocks and leading sectors.

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