Author: Innovative Income Investor

The hawkish tone of the Fed is coming home to roost today in equities and I think we can take J Powell at his word. As it stands today – another 50 basis point rate hike on 2/1/2023 (my words not his).

The S&P500 is off a giant 2.5% at this moment–and at the low of day.

Todays unemployment claims number was below expectations–employment would appear to be remaining relatively strong. Other economic signs were kind of weak–but far from falling off a cliff. But through all these economic signs the 10 year treasury is off 4 basis points around 3.46% as the bond market continues to see weakness sometime in the future. Plenty of cross currents in these markets.

Just ‘eyeballing’ preferreds and baby bonds they appear to be generally red–but more of the nickel and dime stuff–nothing serious. The last time I said this mid day prices hammered lower in the afternoon so hope this isn’t jinxing things for the rest of the day.

Well let’s see if the markets can turn a bit higher for the rest of the day–but as I type the S&P500 is at the low of day.

Well we had the main shows for the week yesterday and Tuesday with the CPI and the FOMC rate hike. Today we have a gaggle of minor reports which shouldn’t move markets much, but one never knows anymore.

Right now equity futures are down over 1% and interest rates have ticked down by a few basis points to 3.45%–it will be interesting watching how interest rates react to having no super major news for a few weeks–maybe we will just drift for weeks–that would be welcome.

I continue my streak of doing nothing (as far as selling or buying)–I did open my accounts to see that they were a bit ‘green’ yesterday–a tiny bit. December is a big month for my accounts for dividends and interest so I have that to look forward to for the end of the month. I doubt I will do anything to speak of as far as selling and buying for the balance of the month–it seems odd to be fully invested without reason to buy or sell.

Well let’s get this day going and see where we end up.

The Fed whacked the equity markets with the expected 50 basis point hike–but with follow up statements that they will remain vigilant and still have work to do–a hawkish tone. The S&P500 moved 2% lower at 1 p.m. central–and moved almost another point lower when Powell began to speak with a hawkish tone.

Interest rates (10 year treasury) are up 3-4 basis points–nothing too harmful.

All I can say at this point in time that those without patience in their investing are going to be disappointed–this game is going on through 2023. The next Fed meeting isn’t until January 31st/February 1st–so lots and lots of data to be scrutinized between now and then. No one can predict what we will see for a rate hike in February–assuming there is one.

For a month or two I am going to assume little upward movement in preferreds and baby bonds–just collect some fat dividends.