📈Stocks Crash on Fed Rate Decision!

Stocks dropped on fed rate hike decision of 75 basis points and fall harder on Powell’s speech. Powell made it clear at the 2:30 PM speech that inflation is persistent and the labor market is staying tight. This led to the belief that the fed could hike 75 basis points in December. Once the realization set in that the fed was not pivoting to a dovish(less aggressive) stance but in fact a more aggressive posture the market sell off accelerated. The Nasdaq dropped 3.6% and SP500 -2.72%. No sector was spared as rates on the 10 year treasury rose 4.08% . It’s important to note the speech from Jerome Powell going into today was viewed as being mild and it was anything but. His frustration showed with how sticky inflation has been. His comment that “A soft landing is still possible” made it clear that they have work to do. He even went as far to say that the fed will have to revisit its terminal rate. This means we can not say we are at peak rates hikes. No other time in history has the fed hiked so large and so fast. They are trying to get ahead of the problem and not seeing the results. I am surprised he gave this speech in front of mid terms on November 8th . No matter who is in office they tend to have milder statements. They do not want to be seen as political. His comment that might explain why: "Public's trust is the Fed's most important asset". In other words he is aware of how the public trust in the institution has been eroded. He views that as his primary objective. Famous investor Stanley Druckenmiller recently wrote that once inflation is over 5% there has been no time in history in which the 10 year treasury did not exceed the rate of inflation before inflation was eradicated. If this is the case we have a long way to go. For a more in depth update on what happened today and the technical levels of the indexes watch the short video below. I also cover several stocks with earnings this evening especially why HOOD was fairly good and RBLX was a disaster. Let’s get to it!

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