“The committee is of a mind to raise the federal funds rate at the March meeting assuming the conditions are appropriate for doing so.”
A prophecy of doom for stock traders? A sign the government is finally taking inflation seriously? A reassuring sign that the adults are in charge?
Perhaps all of those things and none. Federal Reserve Chairman Jerome Powell said it at a news conference yesterday and traders were hanging on every word.
Higher inflation rates are going to make it harder for many growth stocks. Yet inflation – or, worse, stagflation – can doom an economy just as surely. Stocks were up for most of the day but declined as these comments spread during the afternoon.
Yet is this an overreaction? There was a lot of breathing room in that statement – especially the part about “assuming the conditions are appropriate for doing so.”
I wouldn’t count on the Fed dodging an interest rate hike next month – but that doesn’t mean we are suddenly going to get a tight money policy.
The printing press will stay on.
The major issue that is spooking markets (and energy prices) remains the confrontation between the United States and Russia over Ukraine. No progress was made in negotiations… and experts are fiercely divided about what could (or should) happen next.
To get some idea of how the intelligence operatives that still run Russia today (look at Vladimir Putin) operate, don’t miss Dr. Kent Moors’s “Spy Tale” today.
I promise you, you’ll want to read to the last line.
Most new traders have NEVER seen a market like this. So it is more important than ever to have a guide. Chris Hood outlines some strategies you can use now to protect yourself in what seems like an unpredictable market. Don’t worry – Your Options Coach will give you the edge.
Click Here for Episode 55: “Options Trading – Interest Rates, Inverse ETFs, and a Wild Ride In 2022”
WORD ON THE STREET
Mixed Messages On Ukraine, Mystery From The Fed, INTC Crushes
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NATO Split Over Ukraine? – France, Germany, Ukraine, and Russia have reportedly agreed to an unconditional ceasefire in the eastern breakaway portions of Ukraine. This news comes without American involvement. The United States, in written responses to Russian questions, refused to cede any ground on whether NATO will be banned from including Ukraine. Russia may be looking to create a split in the Atlantic alliance.
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Intel Has Best Year Ever – Intel (INTC) beat expectations on both revenue and earnings. Its next-generation chip, which will be in massive demand given the current supply shortage, should be available this quarter. However, the company’s cloud competing division was down 7% year-over-year… though it still performed better than what analysts expected.
The computer chip shortage is slowing, but will continue to dominate the global economy
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Fed Leaves Options Open – The Federal Reserve will be ending bond-buying in late March and is expected to raise rates next month. However, the central bank is leaving some wiggle room in order to respond to circumstances. It was mostly what investors were expecting, though any interest rate increase may have a negative impact on growth stocks.
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Stephen Breyer Retiring – Supreme Court Justice Stephen Breyer is retiring from the Supreme Court, meaning that President Biden will get his chance to replace him with a progressive to shore up the Court’s left wing. President Biden has pledged to nominate a black woman… leading some to wonder if vice president Kamala Harris will get the nod.
HOT SPOTS: What’s Going on in Geopolitics
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Getting To Denmark – Denmark is going to be returning to life in the long, long ago, the times before COVID-19. Prime Minister Mette Frederiksen said that mandates will be mostly tossed on February 1, with mask rules remaining only for hospitals, health care facilities, and old-age homes. “As of Feb. 1, Denmark will be open,” said the PM.
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Navy Tries To Find Fighter Before China – The crash of a F-35C stealth fighter jet has led to a race in the Pacific. The United States is struggling to recover the wreckage before China finds it… as the high-tech equipment could give China a critical advantage in what is becoming an arms race in the Pacific.
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North Korea Launches Missile – North Korea has reportedly filed two missiles in what could be its 6th missile test… just this month. However, North Korea is also suffering its own asymmetric attacks – with the country’s entire Internet taken down by what experts think was the denial of service attack.
CUTTING EDGE: What‘s Happening In Tech
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Tesla Beats Expectations – Tesla (TSLA) reported profit and sales figures that beat expectations. However, there were clouds on the horizon, as its quarterly update also reported that supply shortages are forcing factories to run below capacity. “Tecnoking” Elon Musk said that despite “multiple supply-chain challenges,” he expects major growth this year.
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Picasso Heirs Get In On Digital Art – The heirs of legendary artist Pablo Picasso will be selling digital pieces of art based on one of his ceramic works. A family heirloom, the piece has never been seen publicly.
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Frogs Regrow Limbs – In a new lab study, scientists were able to show that frogs are able to regrow amputated limbs after a cocktail of multiple drugs. The study, published in Science Advances, represent a critical first step for “regenerative medicine,” which aims to simply replace malfunctioning tissues and organs with body parts that perform normally.
FOR YOUR CONSIDERATION
“His body was found in a small boat adrift offshore.”
Even after the Cuban missile crisis, counterintelligence in the Caribbean had life-and-death stakes. Don’t miss this story about the Kennedy assassination, the Cuban dictatorship, and the spy vs spy war that was operating in a tropical paradise. It’s all in this week’s “Spy Tale” from Dr. Kent Moors.
