SPX, Rate hikes and market rally !! lets share ideas.
FED started rate hikes this year and so far has increased interest rate up to 2.25 %. When there was just some news about starting rate hikes market showed a sever bearish sentiment and huge decline started. Now and after 2.25 rate hike market sees 8.5 % inflation as a positive sign !!.
8.5 % is much much higher than 2 % target of FED and implies for continuation of the rate hikes. At least we know that FED will increase at minimum another 0.5 on 21th Sep . Today there were some statements by Charles Evans Chicago FED president that interest rate will be 4% at the end of next year and still market is green.
Inflation data and FED decisions are interpreted to be the market drivers since start of this year but is this true?
Numbers shown on the chart are cumulative interest rate after FED decisions. As we can see SPX today and after 2.25 interest rate is just about 2.5 % down from the day FED raised rates to 0.75 !. Strange !. Can we see higher SPX on 21th Sep ? Is it rational?
Some take this as a positive sign for the market : (( FED finally stops rate hikes next year )). OK but rate was not supposed to go higher and higher forever. It was known from the first day that FED will stop rate hikes some day.
In terms of macroeconomics, Russia -Ukraine war continues, China may invade Taiwan, Iran's nuclear deal result is unknown. Add some giants like NVDA, AMD and MU warnings to this economical climate and please let me know if you can find any positive sign.
What is actual driving force of market? It seems taking interest rates and FED actions into consideration leads to contradictory results. So, what is behind all these market moves?
What do you think about recent market rally? is it just a bear market rally or real bull run has been started from last major low?
What is your idea? Lest share our ideas and boost our knowledge.
Eager to hearing your thoughts.
8.5 % is much much higher than 2 % target of FED and implies for continuation of the rate hikes. At least we know that FED will increase at minimum another 0.5 on 21th Sep . Today there were some statements by Charles Evans Chicago FED president that interest rate will be 4% at the end of next year and still market is green.
Inflation data and FED decisions are interpreted to be the market drivers since start of this year but is this true?
Numbers shown on the chart are cumulative interest rate after FED decisions. As we can see SPX today and after 2.25 interest rate is just about 2.5 % down from the day FED raised rates to 0.75 !. Strange !. Can we see higher SPX on 21th Sep ? Is it rational?
Some take this as a positive sign for the market : (( FED finally stops rate hikes next year )). OK but rate was not supposed to go higher and higher forever. It was known from the first day that FED will stop rate hikes some day.
In terms of macroeconomics, Russia -Ukraine war continues, China may invade Taiwan, Iran's nuclear deal result is unknown. Add some giants like NVDA, AMD and MU warnings to this economical climate and please let me know if you can find any positive sign.
What is actual driving force of market? It seems taking interest rates and FED actions into consideration leads to contradictory results. So, what is behind all these market moves?
What do you think about recent market rally? is it just a bear market rally or real bull run has been started from last major low?
What is your idea? Lest share our ideas and boost our knowledge.
Eager to hearing your thoughts.
Comment:
Market is fighting FED !
Comment:
No one talks even about stopping rate hike and still market is green. Something is wrong here.
Comment:
Fighting the FED does not have welcome ending.
