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🗣 Fed Up, Markets Down
Some hawkish Fed speak brought the markets lower, Disney stock moved lower and more
Brooks Dyroff
April 04, 2024
Happy Thursday Zingernation! Things were looking great this morning. My stocks were trading higher, I was psyched about my new shoes, I was bumping the new Beyonce album, and I was looking forward to the Tigers home opener tomorrow.
But then, the market reversed on some hawkish Fed Speak, I dirtied up my new kicks by stepping in some mud, my mom kicked me off her Spotify and my friend called and said he sold the extra ticket he had to the game. It’s just one of those days. Hey, only up from here, right?
Today’s Price Action:
$SPY: -1.22%
$QQQ: -1.53%
$DIA: -1.34%
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TODAY’S MOST VOLATILE STOCKS
TODAY’S TOP STORY
Briefly: The Federal Reserve appears to be more concerned about inflation than previously anticipated, according to statements made by several officials earlier today.
Some Context: This follows assurances from Fed Chair Jerome Powell, who stated this week that recent inflation figures did not ‘materially change’ the overall picture and that it will most likely be appropriate to begin lowering rates.
In Short: Markets witnessed a sharp reversal at around 1:30 PM today on growing uncertainties about the likelihood of imminent rate cuts.
Release The Hawks: Richmond Fed President Tom Barkin intervened saying that early 2024 data is less encouraging, raising the issue of whether the outlook is shifting. The official said that “it is smart” for the Fed to take time on interest rate cuts.
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FIVE MOVERS
Kura Sushi’s stock was looking as fresh as an avocado roll after the stock reported stronger-than-expected earnings.
iRobot shares traded higher in today’s session after the company announced a new product to help you clean your house.
AMD’s stock got crushed today, closing down nearly 10% after officials delivered some hawkish Fed speak.
Solar stocks like $RUN and $ENPH also took a hit on the interest rate news. Here are the names that got hit the hardest.
Disney’s stock moved slightly lower today after it announced yesterday that it won its proxy battle against Nelson Peltz and other activist investors.
ONE TRADE IDEA FOR TOMORROW
In Short: In an interview from the 2024 Sohn Investment Conference that aired yesterday on CNBC’s “Power Lunch,” Einhorn argued that inflation is no longer going down.
Zooming In: The billionaire investor told CNBC that he expects the Federal Reserve to cut rates fewer times this year than the market is anticipating. The consensus is that there will be three rate cuts in 2024, but Einhorn indicated that there might not be any cuts at all.
Storing Up: The longer the Fed maintains its aggressive monetary policy stance, the greater the chance for an economic downturn. Einhorn noted that Greenlight Capital has been buying shares of SPDR Gold Trust as a hedge against that possibility, but that’s not the firm’s only exposure to gold.
Quoted: "We own a lot more gold than just the GLD. We own physical bars as well. So gold is a very large position for us,” Einhorn said.
Click here for the full breakdown.
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