December 17, 2021
Good morning,
Following Wednesday afternoon’s strong but brief relief rally (relief that Powell didn’t do anything unexpected), investor’s seemed to realize that all three major central banks (Fed, ECB, BoE) were making decisions this week demonstrating that they no longer regard the downside risks to economic activity over the coming months as outweighing the need for address inflation pressure.
Tech sold off hard yesterday on worry about higher interest rates and has taken Futures down overnight as well (down -.70% as I type). Liquidity conditions for financial markets will turn from a tailwind to a modest headwind as QE ends in what now appears to be March.
On top of that cheery news, today is the final expiration day of the year. The S&P 500 hasn’t performed well on triple witching days – it’s been down every one of them since Q1 2020.
Have a great weekend – see you Monday.
Be well,
Mike