UnlockRatingWords have power over the markets. Today, the St. Louis Fed chief said on CNBC that he expects a rate hike in 2022, just days after Jay Powell said 2023. Markets slid. He thinks the Fed will crush inflation merely by talking about raising rates. Seasonality says we're in for bearish selling for 3-4 days before the late-June swoon ends. The Fed is in warning mode. He expects money to keep flowing into the high-growth stocks (tech). Commodities are retreating now as investors fear rate hikes. Buy Adobe, AMC or Amazon.
UnlockRatingBilly Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. The Fed comments have boosted the USD, which is impacting the price of metals. China is also releasing some supply. Probably a short term reaction and believes metals will do well generally. Money printing continues and the impact of stimulus is still positive on gold. Unlock Premium - Try 5i Free
U.S. stocks slide on St. Louis Fed comments
American stocks slid Friday after the St. Louis Fed’s made hawkish comments about seeing the first interest rate hike coming in 2022, not 2023 as his boss Jay Powell said earlier this week. The Dow shed 1.57% on Friday and 3.5% for the week, having its worst day in five weeks, as the S&P slid 1.31% during the session and nearly 2% for the week. The Nasdaq, which had been rallying this week, retreated 0.92%, but lost only 0.28% for the week. There was weakness across the board, from tech to financials.
Goldman Sachs closed -3.01%, Intel -2.25%, Walmart -1.6%, Walgreens -3.31% and Chevron -3.05%. Adobe was an oasis, rallying 2.54% to reach new highs on the back of a positive earnings report. Michael Burry, of The Big Short fame and who called the Great Recession of 2008, warned of “the mother of call crashes” triggered by the highly leveraged Bitcoin rally. The crypto closed -6% to tumble well below $36,000. The U.S. 10-year slipped 0.066% to 1.445%.
The TSX fared better, losing only 0.48% for the session and 50 points for the week, which saw record highs. All the sectors showed weakness, except tech and real estate. Winners included AutoCanada, popping nearly 8%, Lightspeed up almost 4% and Tricon REIT up 2.13%. Reddit/meme favourite, Blackberry, closed -4.15% while Interfor jumped 3.43%. Capstone Mining sank 2.45% while Kinross Gold fell 2.79%. Despite weakness from oil names, the price of WCS advanced 0.8% and WCS 1.3%. However, the Canadian dollar continued to sink, losing 0.72% to 80.37 cents against the USD.
🏛 Goldman Sachs -3.01%
💾 Intel -2.25%
🛒 Walmart Inc -1.6%
💊 Walgreen Boots Alliance -3.31%
🛢 Chevron Texaco -3.05%
💾 Adobe Systems +2.54%
🅱 The Bitcoin Fund -6%
🛒 AutoCanada Inc. +8%
💿 Lightspeed POS +4%
🏛 Tricon Capital Group +2.13%
📱 BlackBerry -4.15%
🌲 Interfor Corp +3.43%
⛏ Capstone Mining Corp. -2.45%
🥇 Kinross Gold -2.79%
UnlockRatingInterest rate trend. The interest rate will probably trend higher. With higher inflationary pressures in the short term and growth will push rates higher. The Feds were gently trying to tell you that.
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