Are You Ready for the Next Stock Market Crash?
In a Nutshell
Markets recovered from a sharp intraday drop after the Fed’s hawkish rate hike, finishing flat despite headlines of massive losses. The speaker attributes the inflation spike to oil-price surges caused by Trump’s attack on Iran, not to the Fed’s policy, and criticizes both Trump and media for blaming the central bank instead. With the Fed united in tightening and Japan poised to potentially dump Treasuries, the risk of a larger correction hinges on whether oil prices—and thus inflation—will ease soon.
These notes were generated by AI and may contain inaccuracies.
The NASDAQ market experienced a V-shaped recovery after an initial aggressive sell-off during the FOMC press conference. Markets moved from nearly 1% in the green to 0.75% in the red after Kevin War's hawkish tone, then recovered into the close and retested previous highs. The market ended flat at 0.03% in the green despite headlines claiming $2.2 trillion was wiped from the market. A 0.5% green day tomorrow would recover all losses from today.
Markets experienced significant volatility but remained relatively flat overall. The speaker emphasizes that headlines about market losses are dramatic, but only forced sellers, overleveraged investors, and margin-called traders actually lost money. The speaker's team had prepared in advance for the volatility. Intel generated $480 in gains, Dell's $2,700 position was fully closed, and shorting MicroStrategy produced $7,100 in profits during the FOMC event.
Kevin War addressed Trump's threat to cut trade with countries if the Federal Reserve doesn't cut interest rates. War stated that the Federal Reserve's independence is a two-way street, telling Trump and his administration to "stay in their lane." This response was unexpected as the speaker anticipated War would bend to political pressure. The Federal Reserve raised rates based on data despite previous optimism.
Raising interest rates is not bullish for markets, and the pullback was healthy given red flags including labor market concerns, employment concerns, inflation concerns, and oil concerns. All 12 Fed members agreed on the rate hike, which was significant even though 25 basis points won't have major impact. This unity signals the Fed's mandate to bring inflation down, regardless of political pressure.
Sign in to read the full notes
Get access to AI-generated notes, topic timestamps, and more.