Are you following FED hikes or the companies you hold?

The Fed hiked key rates by 25 bps in March 2023 policy in order to achieve maximum employment and contain the inflation rate of 2%.

The federal funds rate is now between 4.75% to 5%. However, the Fed also signalled for pausing further rate hikes amidst the recent financial sector turmoil after the failure of US  banks. FOMC said the US banking system is sound and resilient.

 

The rate hike created the following price actions: 

 

1. Gold made a strong rally into 1980, but on profit booking its trading near $1970

2. Oil rallied above $70 from $65. 

3. Bitcoin sold off more than $1000 from $28700+ it’s trading at 27350! 

4. All indices Nasdaq, S&P 500 and Dow lost more than 1.5%!

 

Majority had been counting on a rate cut this year , which did not happen and markets were sold off. I expect the US market to stabilise tomorrow. Yes bulls will be back tomorrow.

 

The coin base also has lost more than 10% in the last 2 days and forming a rounded top (which’s is a bearish sign). This is not because of the FED and those who buy $coin are destined to lose their money. Cathie wood  sold $13.5M coinbase Shares on Tuesday just one day before $coin collapsed. (What a timing?!!) Coinbase CEO Brian Armstrong sold around 90,000 shares in the last 30 days for $5.8 million.

 

Coming back to India markets, market is expected to stabilise at the current levels and could recover from here. We’ll  discuss some stocks next week