Active Trading

Last week’s market action was driven by news. Early in the week, President Biden announced that he was nominating Jerome Powell for a second term as Chair of the Federal Reserve. There is broad bipartisan support for Powell, and Senate confirmation shouldn’t be an issue. That means traders know exactly what to expect of the Fed in the coming months. While inflation is likely to remain uncomfortably high for consumers, the Fed is unlikely to take emergency actions that will hurt the financial markets. If that was the only news we saw last week, I would expect that stocks could… Read More

Last week’s market action was driven by news. Early in the week, President Biden announced that he was nominating Jerome Powell for a second term as Chair of the Federal Reserve. There is broad bipartisan support for Powell, and Senate confirmation shouldn’t be an issue. That means traders know exactly what to expect of the Fed in the coming months. While inflation is likely to remain uncomfortably high for consumers, the Fed is unlikely to take emergency actions that will hurt the financial markets. If that was the only news we saw last week, I would expect that stocks could make a move similar to the one seen after his initial nomination. The arrow in the chart below shows the S&P 500’s response to that news back in late 2017. But, as you know, that wasn’t the only news we got last week. On Friday, The Wall Street Journal explained, “Markets sold off worldwide on Friday after South Africa raised alarm about the new “variant of concern” that the World Health Organization named Omicron. The panic may be driven more by the fear of new government lockdowns and social distancing than by the variant itself.”… Read More