Dow: -94.42…
Nasdaq: -101.29… S&P: -8.56…
The S&P declined 0.2% today and traded slightly lower the entire day, except for the opening tick, which marked an all-time high for the index. The Dow (-0.3%) and Russell 2000 (-0.3%) performed similarly, while the Nasdaq (-0.7%) underperformed.
Trading conviction was largely lacking in front of the Fed’s policy decision tomorrow, although the S&P 500 energy sector (+2.1%) couldn’t be stopped as oil prices ($72.07/bbl, +1.16, +1.6%) continued to rise.
Inflation is ripping and it’s going to be a huge day for Powell and company tomorrow. Will he continue to whistle past the graveyard or finally admit we have inflation? If he goes hawkish, fasten your seat belts. The market will hate it.
If he continues to enable this fake market, then expect prices to go higher….I guess.
Today, the US Producer Pree Index rose by the largest margin in history.
It’s fair to say the market was expecting producer inflation to be running a little hot given the inflation pressures highlighted in previous economic data and the incessant inflation commentary in recent weeks. Judgment might have been reserved for what the Fed has to say about inflation expectations and monetary policy tomorrow.
Because of this uncertainty, you saw bids get hit today as investors took some chips off the table in front of tomorrow’s “big event” I’m sure Powell will say that current inflation is just “transitory”. That’s his favorite new buzzword, lets see if he sticks to it.
No setups tonight, I want to see how tomorrow plays out.