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Is A Fed Interest Rate Hike Already Priced In?
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November 20, 2015

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Inquiring minds want to know.

It’s the question of the day for investors to ponder. That the Fed will raise interest rates was enhanced by a special “closed” meeting Monday. (One can assume the WSJ’s official Fed Whisperer, Jon Hilsenrath may well be attending.) 

11-20-2015 5-34-28 PM

Did this announcement throw markets for a loop? Not really. There have been rumors (perhaps trial balloons?) the Fed will raise interest rates and suggest they’ll marry it to another round of QE. Once they start experimenting with new policies, nothing will stop them going forward. It’s a slippery slope.

Stocks are now expensive from many different measures—cash flow, Pes and so forth. This means institutions are selling while Hedge Funds and Retail are either buying or neutral.

11-20-2015 5-35-46 PM

 Earnings for Nike was a catalyst for markets to rally.

Earnings beat estimates and, of course, the company stated they’ll buyback the obligatory $10 billion in shares.

Naturally they’ll borrow that money taking advantage of low interest rates. And, like many of their peers they’ll just increase company debt.

The song on the street this day is retailers are strong lifting stocks overall.

After seeing weak retail sales from last week and horrible reports from sector leaders like Nordstrom and Target cherry-picking was the order of the day Friday along with technology.

Market sectors moving higher included: S&P 500 (SPY), Technology (QQQ), Small Caps (IWM), Retail (XRT), Healthcare (XLV), Industrials (XLI), Consumer Discretionary (XLY), Regional Banks (KRE), Emerging Markets (EEM), Brazil (EWZ), Russia (RSX), India (EPI), Hong Kong (EWH), South Korea (EWY), Australia (EWA), Asia ex-Japan (AAXJ), China (FXI), Mexico (EWW) and Latin America (ILF).

Market sectors moving lower included: Energy (XLE), Consumer Durables (XLP), Materials (XLB), Europe (VGK), Spain (EWP), UK (EWU), Italy (EWI), Greece (GREK) Euro (FXE), Silver (SLV), Gold (GLD), Gold Stocks (GDX), Alerian MLP (AMJ), Natural Gas (UNG), Base Metals (DBB) and many more.

The top ETF daily market movers by percentage change in volume whether rising or falling is available daily.

 

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11-20-2015 5-36-30 PM

Charts of the Day
  • SPY 5 MINUTE

    SPY  5  MINUTE

  • SPX DAILY

    SPX DAILY

  • SPX WEEKLY

    SPX WEEKLY

  • INDU DAILY

    INDU DAILY

  • INDU WEEKLY

    INDU WEEKLY

  • NDX WEEKLY

    NDX WEEKLY

  • XLB WEEKLY

    XLB WEEKLY

  • XLE WEEKLY

    XLE WEEKLY

  • XLF WEEKLY

    XLF WEEKLY

  • XRT WEEKLY

    XRT WEEKLY

  • XLY WEEKLY

    XLY WEEKLY

  • XLP WEEKLY

    XLP WEEKLY

  • XLV WEEKLY

    XLV WEEKLY

  • XLU WEEKLY

    XLU WEEKLY

  • IYT WEEKLY

    IYT  WEEKLY

  • IYR WEEKLY

    IYR WEEKLY

  • ITB WEEKLY

    ITB WEEKLY

  • TLT WEEKLY

    TLT WEEKLY

  • UUP WEEKLY

    UUP WEEKLY

  • FXE WEEKLY

    FXE WEEKLY

  • FXY WEEKLY

    FXY WEEKLY

  • GLD MONTHLY

    GLD MONTHLY

  • GDX MONTHLY

    GDX MONTHLY

  • SLV MONTHLY

    SLV MONTHLY

  • DBB MONTHLY

    DBB MONTHLY

  • USO MONTHLY

    USO MONTHLY

  • DBA MONTHLY

    DBA MONTHLY

  • EFA WEEKLY

    EFA WEEKLY

  • IEV WEEKLY

    IEV WEEKLY

  • EEM WEEKLY

    EEM WEEKLY

  • EWU WEEKLY

    EWU WEEKLY

  • EWG WEEKLY

    EWG WEEKLY

  • EWJ WEEKLY

    EWJ WEEKLY

  • EWA WEEKLY

    EWA WEEKLY

  • EWC WEEKLY

    EWC WEEKLY

  • EWZ WEEKLY

    EWZ WEEKLY

  • RSX WEEKLY

    RSX WEEKLY

  • EPI WEEKLY

    EPI WEEKLY

  • FXI WEEKLY

    FXI WEEKLY

  • NYMO DAILY

    NYMO  DAILY

    The NYMO is a market breadth indicator that is based on the difference between the number of advancing and declining issues on the NYSE. When readings are +60/-60 markets are extended short-term.


     

  • NYSI DAILY

    NYSI DAILY

    The McClellan Summation Index is a long-term version of the McClellan Oscillator. It is a market breadth indicator, and interpretation is similar to that of the McClellan Oscillator, except that it is more suited to major trends. I believe readings of +1000/-1000 reveal markets as much extended.

  • VIX WEEKLY

    VIX WEEKLY

    The VIX is a widely used measure of market risk and is often referred to as the "investor fear gauge". Interpretation has changed given the dramatic rise of ETF/ETN trading products. In my opinion these new products have changed the VIX markedly.

 

Friday concludes two fast market changes.

First week sharply lower followed by this week’s sharply higher. It’s enough to give main street investors whiplash.

If the rumor is true the Fed will raise interest rates, and at the same time or nearer to it launch another round of QE, that would change how monetary policies have historically been conducted. We would’ve have been better off if we had let companies fail in 2008 but had given the consumers the same money instead.

Let’s see what happens.

...

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Dave Fry is founder and publisher of ETF Digest and has been covering U.S. and global ETFs since 2001.  ETF Digest is listed as #16 in theTop 50 Investing Blogsand named one of the most informative ETF websites in the 10th Annual Global ETF Awards.



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Disclaimer: The charts and comments are only the author's view of market activity and aren't recommendations to buy or sell only any security. Market sectors and related ETF's are selected based on his opinion as to their importance in providing the viewer a comprehensive summary of market conditions for the featured period. Chart annotation's aren't predictive of any future market action rather they only demonstrate the author's opinion as to a range of possibilities going forward. More detailed information, including actionable alerts, are available to subscribers at www.etfdigest.com

 

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