In hisDaily Market Notes report to investors, while commenting on volatility, Louis Navellier wrote:
More Volatility Expected
The market pauses from 3 days of pain as it waits for the Fed‘s move tomorrow. The PPI number came in this morning modestly lower than forecast and stocks are moving sideways after an awful day yesterday, the 4th down day in a row and by far the worst.
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Crypto had an even worse day as a couple of major exchanges suspended trading. The volatility is wrapped around fears that the Fed will raise more than 50bps tomorrow and be more aggressive going forward. This morning, a 75bps increase is deemed likely by market positions.
The big unknown is will the market have a relief rally thinking that inflation is finally being seriously addressed and will therefore be tamed sooner than feared? Or will the move create new sellers from fears that the Fed is panicking and may hasten a recession by overshooting as it chases inflation? Either way, rates will be rising in an attempt to slow demand in order to slow inflation and further volatility is almost guaranteed.
In company news, Harold Hamm, CEO of Continental Resources (NYSE:CLR) has made a $70 offer for the 17% of the Company he doesn't already own and the stock is trading above $73 by expectations that he will raise his bid before it is over. CoinBase (NASDAQ:COIN) a major crypto exchange announced it will be laying off 18% of its workforce due to falling crypto activity. FedEx (NYSE:FDX) stock is up 12% on news of changes brought by activist investors who are taking board seats and a 53% increase in its dividend, the best single day for the stock since 1993.
Closer Bottom?
As the market girds itself for the Fed news tomorrow, don't lose sight that even if the bears are right that a major slowdown is in the cards from a more aggressive Fed, thatmarkets have a long history of recovering even as the economy gets worse.
The bottom may be closer than many investors selling at current levels believe.
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