Equity markets broadly sold off in the final 2 hours of the trading session on Thursday, given the uncertainty of how the economy will turn out. In addition, a statement by a Fed official unnerves investors again.
All 3 significant indexes were green in the early session. The selloff reflects a new trend that investors are willing to sell off on any profitable day. WTI crude oil trended down after hitting $116 in an intraday high, the highest since Sept 2008.
⌛️S&P 500 needs more oil🛻
The index 20-day moving average is around 4420, and it had a problematic experience in holding above this level in recent weeks. Moreover, the uncertainty on the Fed’s monetary policy change also adds concern to the investors’ minds. As a result, Uncle Powell’s inclination to a 0.25% hike which was a comfort seemed to fade.
Indices dived sharply, giving up gain after Cleveland Fed President spooked market participants when she mentioned that the Fed would have to raise rates quickly to fight inflation if it does not come down soon. A further addition is her belief that the Fed-Fund rate will have to shoot above the neutral rate, harmful to stocks.
📮What’s next?🔦
Today, we will receive a piece of important news. The Bureau of Labor Statistics will release the employment figure for February. We are looking at 440,000 additional jobs, slightly below Jan’s 467,000. Investors want to see a strong job figure but not that firm enough to push the Fed to raise rates faster. It is a delicate balance we are aiming for.
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All is well.