I’m on the road traveling today, so a quick update…
After starting super strong as a continuation of January’s big bounce, the wheels have fallen off in February
Since peaking on Feb. 2 through Friday afternoon, the S&P 500 has fallen over 5.5%… the Nasdaq has fallen over 7%… and Cathie Wood’s ARK innovation ETF (NYSEArca: ARKK) has fallen over 15.5% since peaking at $45.46 a share…
I mention ARKK because it’s made up of the high-growth stocks that led the way up all through the month of January as the market ripped higher.
To say it’s been a rough, rocky month is an understatement. And aside from Friday’s hot inflation data, it’s largely because of one thing…
Rising rates.
Federal Reserve Chair Jerome Powell got everyone all excited, people were buying stocks hand over fist… and this is what bothers me most about the Fed’s lack of transparency…
Since the beginning of the month, we’ve had nearly an 80-point move higher in the 2-Year Treasury, which is a LOT.
Long story short, people would rather have guaranteed high yields than take more risks in stocks. And then high-growth names have to pay more to borrow at those higher rates, so that leads to a pain train in those stocks.
For things to start heading higher again, we need volume to return to the market. And by that, I mean big, institutional buying. I do expect that to happen, but until then, we’re just stuck in a bit of a holding pattern.
We’ll be back at it at the normal time for Crush the Open — 9 a.m. this Monday, Feb. 27. We’ve been having amazing crowds, and we can’t thank you guys enough! See you Monday!
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*This is for informational and educational purposes only. There is an inherent risk in trading, so trade at your own risk.
P.S. Set Your Alarm Because You Won’t Want to Miss This!
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