05/05/2022
Dear friends, followers and copiers,🙌
We re happy to inform you that our portfolio is up 5.43% in the past day!💰
Apple Amazon.com Meta Google ) Qualcomm Advanced Micro Devices, (Airbnb Alibaba.com
Check it out: www.etoro.com/people/dowexperts/portfolio ✅
🙋♂️We've been preparing and positioning our portfolio for a post-FOMC rally in equities and risk assets in general throughout the last week. The market had already priced in 11 25 bps hikes for this year before yesterday's Fed interest rate decision and the 50 bps rate hike that we saw was a broad-based consensus figure coming into the decision.
⏰We believe that the projections for multiple future 50 bps rate hikes from the Fed are very far from what we would actually see in terms of tightening by the central, since we've already started seeing a moderation and in some instances even declines in the growth and productivity of the US economy. Investors need to pay close attention to the specific wording that Fed. Chair Jerome Powell laid out yesterday, stating that the "committee believes that two more 50 bps rate hikes SHOULD be on the table, IF the economy continues to grow and expand at the current rate".
What if this growth actually starts to decline?📈
Yesterday, we got a downward surprise on the ISM Non-Manufacturing Index reading for the month of April coming in at 57.1 well below the 58.5 that was expected. The Institute of Supply Management (ISM) Non-Manufacturing Purchasing Managers' Index (PMI) (also known as the ISM Services PMI) report on Business, a composite index is calculated as an indicator of the overall economic condition for the non-manufacturing sector. While it is true that an ISM reading above 50 is signaling for an ongoing economic expansion, it is the underlying trend that matters most as this is one of the most widely used leading economic indicators. Our analysis shows that the ISM has probably already topped and that a moderation of growth expectations should take place in the next few months.
💯We are expecting to see a major move lower for the ISM in the coming months, ultimately dropping down below the 50 mark. When growth slows, inflation will also come down, which will allow the Fed to drastically moderate their super-aggressive tightening plan. This is what investors sensed yesterday and that is why the markets rallied sharply higher.
🥇We anticipated this rhetoric and managed to position ourselves accordingly in advance.
Follow and copy us for more detailed market analyses and insightful trading ideas!🤝