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More Volatility Expected

By Louis Navellier. Originally published at ValueWalk.

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In his Daily Market Notes report to investors, while commenting on volatility, Louis Navellier wrote:

More Volatility Expected

The market pauses from 3 days of pain as it waits for the Fed‘s move tomorrow. The PPI number came in this morning modestly lower than forecast and stocks are moving sideways after an awful day yesterday, the 4th down day in a row and by far the worst.

Q1 2022 hedge fund letters, conferences and more

Crypto had an even worse day as a couple of major exchanges suspended trading.  The volatility is wrapped around fears that the Fed will raise more than 50bps tomorrow and be more aggressive going forward. This morning, a 75bps increase is deemed likely by market positions.

The big unknown is will the market have a relief rally thinking that inflation is finally being seriously addressed and will therefore be tamed sooner than feared?  Or will the move create new sellers from fears that the Fed is panicking and may hasten a recession by overshooting as it chases inflation?  Either way, rates will be rising in an attempt to slow demand in order to slow inflation and further volatility is almost guaranteed.

In company news, Harold Hamm, CEO of Continental Resources (NYSE:CLR) has made a $70 offer for the 17% of the Company he doesn’t already own and the stock is trading above $73 by expectations that he will raise his bid before it is over. CoinBase (NASDAQ:COIN) a major crypto exchange announced it will be laying off 18% of its workforce due to falling crypto activity. FedEx (NYSE:FDX) stock is up 12% on news of changes brought by activist investors who are taking board seats and a 53% increase in its dividend, the best single day for the stock since 1993.

Closer Bottom?

As the market girds itself for the Fed news tomorrow, don’t lose sight that even if the bears are right that a major slowdown is in the cards from a more aggressive Fed, that markets have a long history of recovering even as the economy gets worse.

The bottom may be closer than many investors selling at current levels believe.

Coffee Beans

Russia’s customer base for energy products has shifted towards Asia. The continent has been receiving around half of all Russian seaborne crude since late April. One country that upped its purchases was India, whose daily import value of Russian fossil fuels increased by $65 million between February-March and May 2022, mainly in the form of crude oil. Source: Statista. See the full story here.

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