Wall Street falls more than 1% as Powell flags sharper rate hikes

Today the report is easy.  Powell signaled higher rate hikes while testifying to the Congress, and the market reacted with a huge sell off.  What’s not so easy is explaining the violent reaction to something that very much should have been expected.  Hearing from one expert, “investors should have been expecting Powell’s more hawkish tone,” while another balanced this with, “hearing it directly from Powell is a little different to inferring it from the data.”  

S&P 500 ends slightly higher ahead of Powell testimony, upcoming data

Today’s session was described as “a holding pattern” since all the indexes ended more or less even, but the numbers tell a different story with all the indexes up in the morning, the Dow up some 200 points, and then everything started declining right about noon. It was likely around noon that investors began reacting to Saturday’s comments by San Francisco Fed Prez Mary Daly, “if inflation and labor market data continue to come in hotter than expected, interest rates would need to go higher.”  

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Wall Street closes sharply higher, notches weekly gains as Treasury yields ease

It was a big shot straight up right across the board with positive economic data showing healthy growth with slowing prices and bolstered in the wake of yesterday’s Fed comments that coming rate hikes would be more gentle.  As today’s expert put it, “It’s all about the Fed and how gracefully they can slow the economy.  It suggests [investors] are willing to stay on the plane and are less worried about the landing.”  Q4 is almost over, only 7 companies left to report, and 68% have beaten estimates with earnings falling 3.2%.  Volume remains below average. 

Stocks gain as Bostic backs quarter-point hike

It was a pretty middling day until about 1:30 p.m. when suddenly everything shot up big time, the Dow up 341 points by close. It must have been right around 1:30 that the ordinarily hawkish Fed Governor Bostic made his comments in favor of ¼ point hikes, thereby calming investors fears of more ½ point hikes.  But job growth continues strong and, as Fed Governor Waller put it, “a string of hot data may force the central bank to raise rates higher.”  So all eyes remain on payroll and price data coming soon.  Volume is still below average at 11.1 billion. (Note the job growth graph from 2010-present.) 

S&P, Nasdaq weak as manufacturing stokes Fed concerns

It was another wild seesaw day with the Dow going back and forth in a 250 point range, being as much as 150 points in the red and 90 points in the black  before closing at break-even.  The S&P and Nasdaq didn’t fare as well spending the whole session in the red but losing most of its ground after 1 pm.  Rate hike jitters were again the underlying cause with now everyone waiting on the payrolls and CPI reports coming soon.