Opening Statement from the January 2022 Intelligent Investor (part 1)

Opening Statement from the January 2022 Intelligent Investor (part 1)

Originally published on January 5, 2022


Current Market Activity

On Wednesday, January 5, 2022 the Dow Jones continued with the New Year rally while the S&P 500 and Nasdaq continued to selloff. This all made sense given our previous discussions regarding rising inflation, the expectation of rising interest rates and the impact on valuations.

But if we examine the Fed Watch chart from January 2, 2022 we see that interest rate probabilities (which are determined by Fed funds futures contracts) pointed to a low chance of even one 25bp hike by February 2023. When we saw these data we thought it was quite strange.

By January 5 after the Fed discussed possibly of raising interest rates not long after the taper is scheduled to finished in March, you can see things changes dramatically (second chart). This is when the stock market entered into a strong selloff late in the day.  We will go into more detail in the January market forecasting research...

This article continues.

To continue viewing this entry please sign in to your Client or Member account.

Print article

Restrictions Against Reproduction: No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without the prior written permission of the copyright owner and the Publisher.

These articles and commentaries cannot be reposted or used in any publications for which there is any revenue generated directly or indirectly. These articles cannot be used to enhance the viewer appeal of any website, including any ad revenue on the website, other than those sites for which specific written permission has been granted. Any such violations are unlawful and violators will be prosecuted in accordance with these laws.

Article 19 of the United Nations' Universal Declaration of Human Rights: Everyone has the right to freedom of opinion and expression; this right includes freedom to hold opinions without interference and to seek, receive and impart information and ideas through any media and regardless of frontiers.

This publication (written, audio and video) represents the commentary and/or criticisms from Mike Stathis or other individuals affiliated with Mike Stathis or AVA Investment Analytics (referred to hereafter as the “author”). Therefore, the commentary and/or criticisms only serve as an opinion and therefore should not be taken to be factual representations, regardless of what might be stated in these commentaries/criticisms. There is always a possibility that the author has made one or more unintentional errors, misspoke, misinterpreted information, and/or excluded information which might have altered the commentary and/or criticisms. Hence, you are advised to conduct your own independent investigations so that you can form your own conclusions. We encourage the public to contact us if we have made any errors in statements or assumptions. We also encourage the public to contact us if we have left out relevant information which might alter our conclusions. We cannot promise a response, but we will consider all valid information.