September 20, 2022, 2:27 pm EDT
Bloodshed All Sectors
As shown in the sector chart, red colors cover the entire sector and all available time frames (day, week, month). Definitely, bloodshed markets do not preserve any sectors including the defensive ones.
US Federal banks begin its FOMC meeting today and will conclude tomorrow. It is widely expected that Fed will raise its Fed Fun rates another 0.75%. It is still at a low level at 3% since 1955 as shown. Especially, it is far from the historical high of 15-20% area during the 1980 inflation and energy crisis. However, today’s inflation level of 8.3% (CPI) is also tough to deal with by Fed. Reckless spending by Biden’s administration and near-zero interest rates since 2008 created extraordinary liquidity that will take time and effort to roll back.
Usually, offensive sectors should retreat more than defensive sectors. But, the stock market is at the early stage of a long decline. Therefore, the best strategy during this type of storm is to stay safe in the shelter.
In other words, cash is king.