Euclid Investment Advisory Blog

Review & Analysis at Close September 16, 2022

Comments

It was another down week for stocks and bonds.

Higher than expected CPI inflation data this past Tuesday before the open jolted interest rates, especially the 2-year Treasury, sharply higher and pushed stock and bond prices sharply lower. Speculation abounds that the Fed will raise rates by 1% (or higher) at the conclusion of its meeting next Wednesday, September 21.

There is no doubt that the Market's long-term trend continues down or Bearish. The Market has given back about two-thirds of its gain from the June low to the August high and may test its June low.

Near term, this down-move looks overdone. We see some signs, notably positive divergences between daily indicators and prices, that we may see a bounce up in the next few days.

Market prices are likely to tread water next week until Wednesday's rate announcement and how the Market interprets Chairman Powell's comments.

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