You name it, stocks, bonds, oil, gold, silver, real estate, it all got smashed down pretty well after Janet Yellen and her central bank buddies decided to hike the federal funds rate by 1/4 point, from the unreasonably low figure of 0.25-0.50% to the nearly unreasonable low point of 0.50-0.75.
The only saving grace on the day was the dollar, which strengthened against almost every other currency, the dollar index quoting at 102.24 just after 4:00 pm ET.
While the FOMC move was well-telegraphed and supposedly baked into the markets, stocks still took a nosedive after the 2:00 pm announcement by the Fed. Though it's not much in terms of a rate hike and even less significant since he rate is still at historically low levels under one percent (absurd), perhaps driving the sell-off was the idea that the Fed predicted three rate hikes in 2017, which would ostensibly bring the federal funds rate to an area above one percent by this time next year. Three hikes would put the base rate at 1.25-1.50%. Optimistic, aren't they?
That's a doubtful prediction, however, as the Fed has continually over-promised and under-delivered when it comes to returning the US economy and interest rates to normalcy.
As pointed out in the previous post, the play of the day would have to be in silver and possibly gold, depending on how well-heeled and aristocratic one believes one to be. But not just yet. Wise traders will wait until the dust from this little market spasm settles and the new year selling begins on January 3rd (Yep, New Year's Day is on a Sunday, so Monday, January 2nd is a holiday. See, Trump's already making the country great again by giving everybody an extra day off).
Silver already dropped 30 cents per ounce since the FOMC announcement. Gold took a twenty dollar whacking, from $1160 to $1140. King Midas and the gold bugs are salivating! If there's one thing one can count on in this market is the pair trade on the downside. If stocks are going down, precious metals are going to get hammered, if for no good reason whatsoever. That's what happens when you trade as many contracts in a month as there is gold in the world. It's a fake, controlled, manipulated market, but, it has been steady if not profitable in recent years, once one learns the ins, outs, cheaters, liars and innuendos of playing with REAL MONEY.
Stay tuned to Money Daily as the trade of the year takes place. The few days or weeks wait will be well worth it.
Closing prices, Wednesday, December 14:
Dow: 19,792.53, -118.68 (-0.60%)
NASDAQ: 5,436.67, -27.16 (-0.50%)
S&P 500: 2,253.28, -18.44 (-0.81%)
NYSE Composite: 11,099.21, -137.96 (-1.23%)