Indexes Whipsaw Lower On Hawkish Fed; ATI, CELH, GFS In Focus | Stock Market Today | Summary and Q&A

TL;DR

The stock market initially sold off following the Federal Reserve's announcement of a 75 basis point rate hike, but later rallied and closed with losses of about 1.7-1.8%. The market is facing resistance levels and needs sustained positive days to overcome the correction.

Key Insights

• 😚 The market experienced initial volatility, selling off and then rallying before closing with losses, highlighting uncertainty.
• ☠️ The FED's rate hike indicates a more hawkish stance than expected, with projections for further hikes and possible recession risks.
• 😆 Specific stocks, such as Celsius, ATI, and Global Foundries, show resilience in a challenging market but need sustained positive market conditions to validate buying opportunities.
• 😘 An inverted yield curve and lower GDP projections contribute to bearish sentiments and potential impacts on corporate earnings.
• 🥳 Waiting for a follow-through day and overall positive market trend is crucial for higher odds of successful investments in this market environment.
• 🥳 The market is currently in a correction phase, with resistance levels and the need for multiple positive days to regain momentum.
• 🌍 The metal sector, including ATI, shows relative strength compared to other steel plays.

Transcript

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Questions & Answers

Q: How did the stock market react to the Federal Reserve's rate hike?

Initially, the market sold off, but it later rallied before closing with losses. The volatility suggests uncertainty and the need for sustained positive days.

Q: What are the projections for the FED funds rate in the coming months?

The FED sees a 4.4% FED funds rate by the end of the year, with another 75 basis points hike expected in November. However, projections for 2023 indicate a pause in rate hikes.

Q: What impact does an inverted yield curve have on the market?

An inverted yield curve, where shorter-term yields are higher than longer-term yields, is seen as a warning sign of a potential recession. The wider the spread, the higher the recession risks.

Q: How are specific stocks performing in this challenging market?

Stocks like Celsius, ATI, and Global Foundries are holding up reasonably well, with mixed performance due to market conditions. Investors need to exercise caution and look for confirmation of a real uptrend.

Summary & Key Takeaways

• The Fed raised its key lending rate by 75 basis points, causing an initial market sell-off followed by a rally and eventual losses in major stock indexes.

• The market is close to its June lows and losing sight of the 50-day line, indicating a need for sustained positive days to overcome the current correction.

• The Fed projects a 4.4% FED funds rate by the end of the year and anticipates another 75 basis points hike in November, with a pause in 2023.