November 30, 2022, 2:35 pm EST
Fed Reserve and Santa Rally
Fed reserve chairman Jerome Powell decided to follow through with their market-friendly policies that played the role of Santa Cruz for the holiday seasons.
Smaller interest rate hikes are going to happen in December which provides a reason for the stock market cheering up with big gains: DJIA +1%, S&P 500 +1.86%, Nasdaq +3%.
We can see from the sector bar chart that the offensive sectors: technology, cyclical, and communications, shot up quickly on the left-hand side.
Indeed, Fed cares less about inflation and emphasizes the importance of economic development as many Fed officers expressed their opinions in October. There is no double that Fed is the most influential power to drive the stock market direction. This time stock market is rewarded with about 20% gains in the Dow Jones index from October.
How long the rally will last? We do not know the exact date. But, it will be the time when everyone shout out the pains of inflation. Meantime, we keep holding the inflation-sensitive commodity in material and energy. Financial sector could be worthy of attention, also.