Dow Jones plunges 1,100 points today . . .
In midday trading, the Dow Jones industrial average slumping 3.3 percent. The S&P 500 index sinking 165 points, or 3.8 percent. The tech-heavy Nasdaq was losing biggly, giving back 651 points, or 5 percent.
I am not looking at investments today. The drop was wiping out the gains from the previous session’s massive rally. All reactions to the FED jumping the rates up 1/2 of 1%.
What remains to be seen???
Nancy Davis, founder of asset management firm Quadratic Capital Management: “The market is way too optimistic about the Fed’s ability to tame inflation. The Fed is hiking aggressively into a weakening economy. They can raise rates as much as they want — rate hikes don’t put more truckers on the roads.”
A few posts down in “Getting It Planted,” farmer-economist Michael Smith is optimistic about the current planting season and getting 2022 crops in this year. And yes, even with low soil temps, too much precipitation or too little rain in various parts of the US. Not farmers first growing season and they can catchup and recoup.
In today’s Musical Chairs in the Jobs Market . . . NDd predicts more job hopping and openings with wages continuing to rise in the short term. Lower spending may lead to weaker monthly job gains.
This is still a supply chain issue which the Fed raising its rate is not going to solve. As spending decreases so will demands for supply and inflation. Nancy Davis is correct also.
“Dow plunges more than 1,000 points as fears about economy intensify (msn.com)“
“We Will Get It Planted – Angry Bear (angrybearblog.com)“
“The game of musical chairs in the jobs market intensifies to all-time highs – Angry Bear (angrybearblog.com)“
You think that’s interesting. Just wait till interest rates go to a full 1 percent.
Really Russ?
I am assuming you are speaking about the FED.
The FED is awfully good at whacking the plebians rather than solving the issues. It has been a practice of theirs for a long time. Consumer spending is slowing, corporations are still rent taking, and supply chain is still a big issue.
So the “market” has no confidence in the FED? Frankly, I don’t think the market know what it wants. Minding the slipperiness of money, maximizing efficiency to all exclusion of planning for stuff to go wrong thus having systems in place just in case has put us here. The banking sector has been winning to the economy’s detriment.
At the same time, I wonder how much of the market response is trying to figure out what the Republicans are doing to our country and how to respond.
Daniel:
The FED is off tilting with windmills for now. It will have an impact over time though. As NDd writes the two areas where prices have been up, are autos and housing. Both because of materials or supply chain which incorporates materials. Higher interest rates for loan will slow down demand, and supply will catch up with demand, supersede it, and we should see some decreased pricing. We did this in 2009-2010 with auto due to semiconductors. Automotive did not maintain orders to suppliers just like they did not this go-around. I lived it.
Except this time Housing and Autos are more into market manipulation.
The Dow was down 1063 yesterday.
It was up a total of 1084 the three previous days, and down 939 the day before that.
The market is rather choppy these days, but trending down.
The Dobbs Index is down about 15% since last year’s high.
FWIW, it’s now right about where it was in November 2020.
The decline continues.
Dow down another 81 points in the two days since.
The Dobbs Index is now 17% lower since last year’s high.
Err: Dow down another 752 points in the two days since.
Fred
FED just has to say “rate-hike” and it fades away.