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👆 A short-term pump spurred on by JPow
Honeywell gives a nod of approval 👍🎉
Fed signals holding rates high going forward 👇
The most important themes of the day.
ShitCos, SPACs, and tech stocks rejoice!
✋ Fed pauses on rate hikes / The Fed decided to leave rates unchanged at their meeting today. While this was widely expected, it is still a nice relief after the Fed went on hiking spree this past year taking rates from 0% to 5.25% today.
From JPow to JWoww.
The breather we’ve been waiting for / If the Fed stops raising interest rates, profits in years far away become worth more today. So, if you bought garbage SPACs that Chamath pumped during the pandemic 🤦, it’s a good time time to take some profits and hit the gym.
The economy is still strong / The good news is that the Fed believes the economy is holding up very well. Frankly, it is holding up a lot better than most people anticipate, including the gloom and doom billionaires out there like Stan Druckenmiller. 💪💪
But that means rates may have to go up just a bit more / The market expected the Fed to raise interest rates by 25bps just one more time, putting these odds at 70%. However, Fed officials believe that 2 more rate hikes are coming this year to end the cycle peak at 5.75%. They believe that will bring inflation back down to the 2% level.
The Finsight 🐂📈: Call it a miracle? The Fed may have engineered the perfect soft landing by raising rates into a a roaring economy that is coming alive post-Covid.
If we start to see recessionary signs in the U.S. as all the naysayers are calling out, the Fed will have plenty of room to cut interest rates. Not to mention, if China stimulates their economy with a bazooka, our economy (and the stock market) could be off to the races again soon. 👆
Honeywell says all is well
The background / Honeywell is a global conglomerate with a ton of business lines. These include Aerospace (cockpit displays, engines, and satellite communications), Building Technologies (fire alarm panels, building control systems, and surveillance systems), Performance Materials and Technologies (specialty chemicals for industrial uses), and Safety and Productivity Solutions (hard hats, protective clothing, and scanners).
In short, they build a lot of stuff.
Things are actually okay / Today, Honeywell’s management team told us a lot about the economy and how everything is actually okay. Aerospace is on fire as everyone travels again, manufacturing is starting to improve again, and economically sensitive parts of the business are starting to rebound.
The Finsight 🐂📈: Who said we’re going into a recession? Throw away your recession playbook. You might not need to own the safe stuff like $CPB or $KHC.
Chatter on the Street.
“I still think, and my colleagues agree, that the risks to inflation are to the upside still. So we don't think we're there with inflation yet...what we'd like to see is credible evidence that inflation is topping out and then getting to come down”
““We are seeing stepped up healthcare consumption by seniors as COVID fades further into the background"
Amazon’s AWS is considering using AMD’s new AI chips, but hasn’t made a final decision (Reuters)
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Fin-specto Revelio!