To The Moon

Coasting on a Monday

The markets $DJIA(.DJI)$, $NASDAQ(.IXIC)$and $S&P 500(.SPX)$coasted on Monday in a prelude to a week chockful of earnings and the much awaited Fed's rate decision. 

We all know very well inflation is rampant and need no reminder. There is price pressure across the board and rate increases will only place more pressure on consumers as well as enterprises which depend too much on debt. Hence the P/E and valuation squeeze especially on growth stocks. 

I believe the big tech earnings this week will very much influence investors' sentiments. As will the Feds decisions on rates. What big tech say as well as the big enterprises project going forward will be seen as a barometer of theeconomy going forward and will be used as agauge to determine exposure to the market. 

If the Feds increase rates by 75 basis points which is the most likely scenario and goes on to say that they will move forward by looking at market data, that might encourage the bullswho are hoping signs of inflation peaking might influence the Feds to step on the brakes slightly with regards to rate increases. If the Feds hike by 100 basis points and sound even more hawkish, that might encourage bears who will see recession as a basis to sell. 

My point having said all these is that it is still not very clear which direction the market might take going forward. But depending on time frame and what kind of investor you are, you might either want to take a dip now and wait out the volatility or wait for a safer clearer entry.

Stay safe 😊