June 11, 2022 | Daily JAM, Weekend JAM |
After Friday’s gut punch to stocks, the Wednesday, June 15, the meeting of the Federal Reserve’s interest-rate will be even more important for stock market direction. I argued back on June 2 in my video “Beware the Fed’s Dot Plot” that the June 15 meeting was likely to create big waves in the financial markets. Investors and traders would be ready to buy or sell big time depending on what the Fed said in its Dot Plot about its expectations for future interest rates, inflation, and economic growth. The Fed had already lowered its projections for economic growth, raised its projections for inflation, and increased its projections for interest rates at the end of 2022 and in 2023 at its March 16 meeting and the release of a Dot Plot on future expectations.Now, though, after inflation rose aggressively to an annual 8.6% rate in the May Consumer Price Index report on Friday, the stakes are even higher.
May 29, 2022 | Daily JAM, Weekend JAM |
I’m looking for a test of the new “Fed Call” theory.
A few weeks ago, before last week’s rally anyway, the theory starting going around that the “Fed Put” (sometimes called the “Powell Put”) was dead. The Fed Put (in place since the days when it was called the “Greenspan Put”) held that investors and traders didn’t have to worry about the dangers of a big downside move in the stock market because the Federal Reserve would ride to the rescue, flooding the financial markets with cheap money, and rescuing stocks. The new thinking, however, was that with the Fed looking to contain potentially run-away inflation, the Fed would be happy to see stocks take a substantial but not dangerous tumble because that would act to damp sentiment and restrain spending. A decline in stock prices was, for this point of view, an ally of the Fed’s policy of increasing interest rates. The question is, of course, how active the Fed would be in “encouraging” a decline in stock prices
May 7, 2022 | COP, PXD, Weekend JAM |
It’s likely that the current “disagreement” about how fast Russian oil production is falling will be resolved in favor of “pretty fast” despite spin from Moscow. Which would mean that Friday’s jump in oil prices–West Texas Intermediate crude gained 2.165 to $110.60 a barrel–will continue. And so will Friday’s rally in oil stocks. ConocoPhilips (COP), for example, was up 4.69% on Friday. Pioneer Natural Resources (PXD) gained 5.35%.
April 30, 2022 | Weekend JAM |
The Federal Reserve will meet on Wednesday, May 4, and raise interest rates. Fed officials, including Fed chair Jerome Powell have spent the last couple of weeks state and restating the need for an interest rate increase to combat inflation running at 8.5% (according to the Consumer Price Index.) A failure to increase interest rates would be shocking after all those “hints.” The only real questions are How big an increase? And how will stocks respond?
February 13, 2021 | Daily JAM, ILMN, Weekend JAM |
Genome sequencing equipment maker and consumables supplier Illumina raised its forecast for 2021 sales growth to 17% to 20% for 2021
