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@theMarket: Beware the Hikes of March
By Bill Schmick,
03:08PM / Friday, January 14, 2022
There is a more than an even chance that the Federal Reserve Bank hikes interest rates at least 25 basis points by the end of March 2022. Several analysts expect another three hikes by the end of the year. As an equity investor, this should concern you.   This week, both the Consumer Price Index (CPI), and the Producer Price Index (PPI) came in as expected. But "expected" does not mean anything like good on the inflation front. On a year-over-year basis CPI was up 7 percent, while PPI hit 9.7 percent for all of 2021.   And while economists debate whether inflation and economic growth will subside over the course of this year, the Omicron variant is

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@theMarket: Fed Meeting Notes Throw Markets a Curve
By Bill Schmick,
03:11PM / Friday, January 07, 2022
Investors were set back on their heels this week after reading the latest member comments from the Federal Open Market Committee's December 2021 meeting. It suggests that the Fed is prepared to tighten far sooner than most expected.   Members seem to say that the Federal reserve bank central bank was prepared to shrink its $9 trillion balance sheet "much sooner and faster" than anyone expected. This is in addition to the already announced plan to reduce its asset purchases faster than they first planned. Couple that with expectations that we could see three interest rate hikes this year and one can understand why stocks dropped this week.   The

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@theMarket: Markets Up on Thin Holiday Trading
By Bill Schmick,
03:15PM / Friday, December 31, 2021
The Santa Rally continued this week with the S&P 500 Index hitting a new record high. Most stocks that gained did so on little volume. Don't read too much into this week's gains, however.   There is an old, rarely used term called "painting the tape." It is a mild form of market manipulation where market traders buy and sell securities among themselves to create an appearance of substantial trading activity. The goal is to fool investors into buying into stocks, sectors, or the market thereby driving prices higher.   These kinds of tactics often result in an unsustainable spike higher in the averages, followed by a period of consolidation,

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@theMarket: Markets Are Heading for Trouble
By Bill Schmick,
04:16PM / Friday, December 24, 2021
The continuing volatility in the stock market is troubling. It is likely signaling difficult times ahead as early as January or February 2022. As such, it is time to consider risk management.   After over a decade of steadily rising equity prices with few interruptions, investors have been lulled into believing that investing in stocks is a riskless game of never-ending profitability. Newcomers to the stock market arena, like your typical Robinhood investor, have been using stocks to supplement, or even replace, earned income.  Unfortunately, I believe we are entering an environment where the investment themes are changing to our detriment.   The most

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@theMarket: Markets Keep Churning
By Bill Schmick,
04:32PM / Friday, December 17, 2021
As most investors expected, the Federal Open Market Committee announced the start of their tapering effort but doubled the pace of the monthly taper to $30 billion a month until March 2022 when the effort will conclude. In addition, FOMC members see three, 25-basis-point increases in the Fed Funds interest rate next year, and more in 2023.   Faced with the end of a decades-long era of loose monetary policy, historical behavior would indicate interest rates up, equities down. That still seems a good bet despite the market's immediate reaction to the Fed announcement.   Some participants may still be scratching their heads after Wednesday's (Dec. 16)

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