Good morning contrarians! It is Thursday, Dec. 15.
Stocks sold off yesterday after a volatile day of trading. The Fed raised interest rates by 50 basis points as expected, and kept the policy statement all but unchanged, but expectations of higher interest rates into next year spooked markets a bit. Then Jerome Powell didn’t deliver enough in the way of pivot hope-ium to entice buyers. The Nasdaq ended the day down 0.8%, worst among US indexes.
State of Play
As of 0620, it looks like ‘risk off’ is taking hold:
Stock futures are down, led by tech. The Nasdaq is off by 1.3% with the S&P about 1% lower;
Gold and silver are selling off, down 1.6% and 3.2%, respectively. This is a solid indication this is indeed about the Fed, specifically interest rates. WTI crude oil is unchanged at $77.50/barrel as copper is down 1.5%;
Cryptos are continuing the sell-off that ensued with the Fed, with Bitcoin down another 1% this morning to trade around $17,700. It briefly broached $18,000 yesterday;
Bonds are unchanged. The 2-year yield is 4.25%, the 10-year 3.49%. This may be an indication the Fed fears are overhyped.
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