The indexes ended the day with a slight loss at negative latitude, but wasted a strong rebound that developed at the beginning of the session, when Fed Chairman Jerome Powell testified before the Senate.
Powell has managed to spark good market movements recently as he speaks. Powell sounded optimistic on Wednesday about how the economy will cope with aggressive interest rate hikes, but then admitted that the risk of a recession has increased and that is caused more pressure.
The market is becoming increasingly worried about a recession, but this is positive for bonds, which are considered a safe haven and also serve to reduce oil demand, which has led to a sharp drop in oil stocks.
Market fears are shifting back and forth from inflationary concerns to recessionary concerns. Bonds are rising throughout the week as the risk of recession increases. We are still worried about inflation, but a recession is a good way to cut prices.
Unfortunately, this is a terrible environment for stock selection. Stocks are mostly driven by indices at the moment and this action is arbitrary at best. There is simply no confidence that upward momentum can be sustained at this time as we struggle with the greatest economic turmoil in many years.
This action will eventually lead to an epic rally, but we must remain patient and follow the price action until it changes.
Dealer Anatoliy Pavlov