Fed panic index skyrockets, prices will triple next year?

The most common year-end bullish trend in history will not happen this year.

After commodity prices and prices rebounded from last week's decline, the Dow Jones Industrial Average rose 1.9% on Monday, December 6, its biggest gain since November 2020. This is also what the Dow Jones Industrial Average sees it. This is one of the biggest advantages. The S&P 500 was up 1.2% and the Nasdaq Composite was up 0.9%.

According to a report released before Sunday, December 5, Fauci said the level of new pathogens of the novel Omicron virus is relatively low compared to the Delta. The Financial Services Corporation of China also announced yesterday that it will reduce deposit withdrawals from financial institutions, in order to strengthen support for the real economy, especially small and medium enterprises (SMEs) and small businesses.

During the last trading day, US stocks fell due to the rise in the Omicheron and the possibility that the Fed could quickly end its policies. Volatility rises to 32. The indicator remains around 15 at the end of October. The VIX index fell to 27.18 on Monday.

“Barron Weekly” believes investors did not come out of nowhere and that the stock market will continue to be affected by news about Omi Keron. In addition, another factor affecting investor sentiment is the direction of the Fed's policy, so investors should be prepared not to change anything.

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It's hard to see an 'end of year uptrend' trading this year

Russ Mold, analyst at AJ Bell, a brokerage firm, said: “We are at the stage of estimating how much Omicheron will have.

Barron's Weekly pointed out that the uncertainty led by Omi Keron is already very negative, and it is the Fed's shift in stance that has made retailers more fearful.

President Powell said in a hearing last week that the Fed will decide to increase its monthly debt from $ 15 billion to $ 30 billion. He hopes to announce the decision at the Fed's meeting next week. Just a month ago, the Fed announced it would cut its reducing assets by $ 15 billion per month, starting in November.This slowdown means that the Fed will end its spending debt in mid-March, not mid-June as planned.

Data released on Friday showed the US unemployment rate fell to 4.2% in October from 4.6% and workplace unemployment rose to 61.8%. In addition, the Department of Non-Manufacturing Administration rose to 69.1, and manufacturing output topped 60. US GDP growth is expected to reach 9.7 percent in the fourth quarter. All of this suggests that financial and performance issues will not impact the pace of the Fed.

Dave Donabedian (Dave Donabedian), Chief Investment Officer of CIBC Private Wealth US, said: “President Powell's preference to accelerate policy tightening indicates that some policy changes are imminent.

"Traders are now at a crossroads," said Deutsche Bank expert Jim Reid (Jim Reid).

“Barron's Weekly” believes that these two differences have different meanings for different types of products and indicators.

If Omi Keron isn't as heavy as people fear, the market could be doing better than expected, which is good for the sensitive commodity market like many of Dow's. However, a price increase could lead to a decline in value-added products for many Nasdaq brands.

Sevens Report analyst Tom Essaye (Tom Essaye) said: “As the market appears to see the tech industry emerge after the week, the next Nasdaq addition could be the decision of All Markets Are Different For One. day. “If it goes down, it can be stable, and as long as the Nasdaq is stable, the whole market can go down,” he said.

Cliff Noreen, Director of Global Investments at MassMutual, said: “The market is re-evaluating its high returns.

Prepare for promotion

From "giant" to "giant"

MarketWatch sees the Fed lowering its buy rating target as it plans to raise on-demand prices as US inflation breaks a 30-year high of 6% in October.Fed officials don't want debt to be bought and inflation to rise. It's like pressing the accelerator pedal and simultaneously pressing the brake.

According to research data compiled by US financial advisers JP Morgan Jay Barry and Jason Hunter, the Personal Expenditure Deflator (PCE), the Fed's most worrying financial measures, this actual government investment is -4% .

According to FedWatch data from the Chicago Mercantile Exchange (CME), futures markets now expect the Fed to increase federal income by 25 points from 0 to 0.25% from June of next year , after the second promotion. It could raise prices in September next year and raise prices for the third time in December.

In one year, public investments will be of the order of 0.75% to 1%. Looking at other derivatives markets, however, government revenues will maintain the three-year high of around 1.50%, and even inflation will miraculously fall to the Fed's long-term target of 2%. , the reality of public financing is still not good at the moment. .

"Barron's Weekly" indicates that it is.Rising interest rates only shift the Fed's future policy from "very concise" to "very conclusive".

Money is more important

Watch for these products for next year

Bank of America recently predicted that the Fed would hike interest rates three times in 2022. Banking experts expect the stock market to remain stable for next year, but remain bullish.

Michelle Meyer, director of financial research at Bank of America, says:The Fed plans to hike rates three times in 2022, four more in 2023, and one more in 2024.

Savita Subramanian (Savita Subramanian), a US venture capital firm and several ESG think tanks and research director, estimates that S&P 500 revenue will grow 6.5% in 2022, but the indicator will point to next year at current level and at the end of 2022. I will have around 4600.

According to his needs,Over the next ten years, the rally in the S&P 500 could be negative and dividends will become a big part of the return on investment.Dividends have contributed almost a third of total product recovery over the past 100 years, but Subramaniya believes that figure could be higher for many years to come.

Subramaniya noted that commodity growth could have a significant impact on market volatility if interest rates rise next year. He said the Biden chief executive said the cost of construction is expected to be boosted by investment from U.S. businesses and the beneficiaries of the change may do better next year.

He is bullish on electronics, medical devices and financial products and encourages investors to cut back on consumer products and services. Through a lucrative investment, he favors high value companies, blue chip companies (those with good credentials and good earnings) and small stocks.