Stocks Explode Higher… Here’s Why
After an ugly night in the futures markets, US equity markets went into full ramp mode shortly after 0900ET and all the majors are back in the green for the day now…
It’s truly anyone’s guess why but three main triggers are being discussed across trading desks:
1) Federal Reserve Bank of Philadelphia President Patrick Harker said this morning that it’s possible the U.S. economy might see a modest contraction in growth but he expects the job market to remain strong.
“We could have a couple of negative quarters,” Mr. Harker said in an interview on Yahoo’s finance channel. But he cautioned that he didn’t necessarily see that as recessionary, and he noted “we still have very tight labor markets” and “we’re going to continue, in my view, to have tight labor markets.”
Why did the market rally on that? Simple – it brings the inevitable recession closer and the inevitable rate-cuts and QE response.
The increase in the market’s expectation for post-hike rate-cuts are rising…
2) The market was bracing for a more hawkish Powell during this morning’s Humphrey-Hawkins testimony
3) Hints during his testimony that Congress had had enough of Powell. Senator Elizabeth Warren warned that Powell could drive “economy off a cliff” – and may soon force him behind close doors to pivot dovish (especially since new data – Atlanta Fed GDPNOW collapse – has come to light since the FOMC meeting).
Liz Warren bought calls: “the one thing worse than high inflation and low unemployment is high inflation and a recession, and i hope you reconsider”
Yes! Hike the inflation target to 10% and send ES to 10K and bitcoin to 100K
— zerohedge (@zerohedge) June 22, 2022
All that news is confirmed by Gold’s surge too…
So bad news is good news America – embrace the recession and buy stocks, gold, and crypto. FTW!
Wed, 06/22/2022 – 10:40
Source: Zero Hedge News
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