Seeing patterns can help you a lot as a boxer, and an investor.
Are we about to see the stock market equivalent of jab, jab, right hook…?Fortune & Freedom brought to you by Paolo Cabrelli | 02 Dec 2021 |
|
|
Dear Reader,
Seeing patterns can help you a lot as a boxer, and an investor.
In boxing, a couple of jabs followed by a big hook is a pretty common combination.
And so, once a boxer sees a couple jabs, they often prepare to duck and counter an incoming hook.
Well, for investors, I'd suggest the "jabs" to watch for are events that "hit" the stock market.
And by "hit", I mean they move the market – up or down – enough for people to notice. But not enough to cause a lasting change.
For the "hooks", I'd call these events in the markets that will cause lasting change – i.e. they take a relatively long time to recover, or an event that markets never recover from.
And the big question right now is…
Is the stock market expecting an incoming "hook"?
News of the Omicron variant "jabbed" markets on Friday. Causing the S&P 500 to take a 2.9% tumble.
Then during a speech, Jay Powell – chair of the Federal Reserve – took his attempt at a jab…
He indicated that he's in support of accelerating the US central bank tightening monetary policy in an attempt to combat rising inflation. Even as he acknowledged the potential risk of Omicron to the economy.
The result… A second jab landed, and the equities sell-off continued.
And with that…
Wall Street's VIX index – a measure of expected stock market volatility – rose to 27 from 23 in the previous session.
That's 7 points higher than its long-run average of 20.
This suggests that investors are expecting markets to remain volatile as information emerges about Omicron and the capacity of governments and vaccines to contain it.
"So… where's the hook?" I hear you ask.
Well, it could be…
- Massive interest rate hikes to combat inflation
- Inflation skyrocketing as monetary policy fails to contain it
- Lockdowns being imposed ร la March 2020.
Or none at all! And these jabs simply turn into a great opportunity to "buy the dip"…
To get a deeper insight on recent events, you can join market commentator Boaz Shoshan and former Wall Street banker John Butler for Southbank Live today at 7pm.
They'll be discussing:
- The Omicron variant's effects on the markets. And if they'll cause a repeat of March 2020.
- How Fed chair Powell is no longer speaking about inflation as "transitory", and why that's important for everyone (not just investors).
John Butler will also be giving his long and short for the week – that's something he's bullish on and something he's bearish on this week.
And as always, they'll be answering your questions. Just leave them in the comments during the live steam.
The live steam will be 7pm today.
You can join here (or set a reminder on the page if you're early).
Paolo Cabrelli Publisher, Southbank Investment Research
You may be interested inReady to continue this conversation over on Facebook? Have your say. Read what your fellow investors are thinking. Click [HERE] to join us now! |
|
|
|
. |
Although Southbank Investment Research Ltd, the publisher of Fortune and Freedom is regulated by the Financial Conduct Authority, the editorial content in Fortune and Freedom is not regulated by the Financial Conduct Authority.
The editorial content is for general information only; it gives no advice on investments and is not intended to be relied upon by individual readers in making (or not making) specific investment decisions. Appropriate independent advice should be obtained before making any such decision.
From time to time we may tell you about other information services published by Southbank Investment Research Limited which do contain content which is regulated by the FCA. When viewing that regulated content, you should review the risk warnings accompanying it.
If you have any questions you can call us on 0203 514 2487 Monday to Friday, 9.00 am -5.30pm or alternatively email customerservice@fortuneandfreedom.com
Email Reference: FAFED01
ISSN: 2635-0009
If you would like to unsubscribe from Fortune and Freedom please click here. Full details of our complaints procedure, privacy policy and terms and conditions can be found on our website, www.southbankresearch.com.
© 2021 Southbank Investment Research Ltd. Registered in England and Wales No 9539630. VAT No GB629 7287 94. Registered Office: 2nd Floor, Crowne House, 56-58 Southwark Street, London, SE1 1UN. Authorised and regulated by the Financial Conduct Authority. FRN 706697.
|
|
|
Tidak ada komentar:
Posting Komentar