Rate Hike Odds Dive: Any Rate Hikes in 2019? Sucker Rally? Musical Tribute!

Stocks recovered from a huge move lower after a speculative WSJ report on a new data-dependent Fed. Any hikes coming?

The Wall Street Journal reports Fed Weighs Wait-and-See Approach on Future Rate Increases.

Federal Reserve officials are considering whether to signal a new wait-and-see approach after a likely interest-rate increase at their meeting in December, which could slow down the pace of rate increases next year.

Sucker Rally

The Dow industrials tumbled were down over 700 points before sharply rallying in the final hour to close down about 79 points.

Assuming one can attribute a stock market move to silliness as opposed to randomness, that WSJ report fits the bill.

Technically speaking, stocks bounced off strong support.

Dow Support Levels Daily Chart

There are support levels every couple thousand points below but this is the major one.

Dow Support Levels Weekly Chart

I highly doubt this rally holds. Each time a level is tested, conviction and buyers give away. Quintuple bottom? Really?

December 2019 Rate Hike Odds

Note that the above chart displays rate hike odds for a year from now, not the December 19, 2018 meeting coming up. I am assuming a hike on December 19.

Will the Fed Hike in 2019?

Maybe Baby

Recession Coming

Full inversion? Maybe baby, but I doubt it. A recession is on the way.

If the Fed does not hike in 2019, I doubt the 3-month to 30-year yield curve inversion that people seem to expect will occur.

The Fed is Slowly Hiking Into a Recession and we are nearly there.

Mike "Mish" Shedlock

Comments
No. 1-12
sunny129
sunny129

Spot on!

sunny129
sunny129

The Stocks remain overvalued. Bull is tired and long on tooth. Earnings warnings are popping up daily. Massive DEBT overhang of all different kind, increased to record level since '09! Don't forget trade wars intensifying!

Where is that HOPIUM sunshine' data coming to rescue us from the looming recession? Are we trapped in collective cognitive resonance zone?

Realist
Realist

Ten years of economic growth is a farce? Eventually there will be a recession. Then you will calling this time period “the good old days”.

Casual_Observer
Casual_Observer

FWIW the growth story was always a farce because most of it was due to inventory overhang and one time tax cuts. Why have corporate profits declined and markets declined ? We are back stall speed now. If you count up the long term unemployed and include them in all economic stats we surely never came out of the last recession.

Casual_Observer
Casual_Observer

What bounce ? All major indices are now giving back 2017 gains.

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