After the Fed Chair Powell gave statements about 50 basis point hike being on the table for May last Thursday, the market immediately turned bearish despite great earnings reports from TESLA and IBM. The next day the market participants were talking about a shock-and awe hike of 75 basis points in pre-market and the market had a big selloff on Friday.
Since the Fed officials came out one after another to telegraph the speedier plan to raise rates and shrink balance sheet, the market responded with overwhelming negative sentiment. As of now, the sector leadership since March 14th, 2022 is Consumer Staples (XLP up 9.78%) with Energy (XLE up 7.11%), S&P 500
Last week one after another Fed officials stepped out making very hawkish statements about its plans to tighten monetary policies. The Fed telegraphed that they are going to raise rates and shrink balance sheet aggressively to combat inflation. This is the tightest monetary policy since 1994 if the Fed is able to execute
After the DOW and S&P 500 both took out the 62.8% retracement of the recent correction and the NASDAQ took out 14200 level, the stock market had its first mild pullback since the March 14th low last week. The White House announced that they will release one million barrels per day from Strategic Petroleum
