FOMC Update
There was a minor red last night after FOMC meeting – no crash yet but FED still raise rate by 50 basis points, taking the borrowing rate to a targeted range between 4.25% and 4.5%, the highest level in 15 years. 2023 Terminal rate = 5.1% (5.0%-5.25%)
Higher Debts Instruments
Those holding higher Debts instruments such as Reits or company that is highly geared should still be careful. Now is the market bear rally thinking FED will pivot. CPI now is 7.1% but the terminal rate is 2%, very far from now.
I think the real picture will come during the next report seasons – we will see how far the interest affects the earnings of the companies. As saying goes, its only when the tide goes out, then we will see who swimming is naked.
Quite likely the rate hikes etc won’t affect the market much as of now, but the earnings or any sudden black swan (collapse of big companies due to poor earnings in recessions etc or any unexpected events) might. Do be careful and plan well.
Technical Points of view
From TA point of view, S&P 500 possible upside to test 4300 first or sell off to break below 3500. Daily chart shows higher highs and higher low whereas weekly charts show lower highs and lower lows.
Crypto Updates
There are lots of FUDs information about Binance for the past few days. Quite likely this will make Binance stronger, showing that they can make it through the current stress test. However, for those who are concern/worry, do consider putting your coins in hard wallet. Ultimately, not your wallet, not your coins.
Conclusion
In my view, market will come down, but the question is when. My sense is that it will be soon. Plan and pace your buy, keep your job, lock up your emergency funds somewhere in high yielding accounts, SSB, treasury yields, MMF etc.
Remember to only buy companies/cryptos that pass your sleep test. Stay safe everyone!
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