Friday 21, January 2022

Wrap

I don’t have time to write much. Basically this was another risk-off day:

• US equity indexes off ~2% (NDX 2.8%),
• all OECD govt. bonds up,
• risk off currencies (JPY, EUR) up, USD fairly flat but DXY slightly down,
• commodities massacred, except gas, which always is like that,
• some big FAANG stocks taking a hit: $AMZN and $TSLA down > 5%. So much for Crazy Cathie’s strategy of hedging with $AAPL. (TBF, it’s only down 1%),

This is all attributed to worry that the Fed will tighten.

The power of the Fed to influence the real economy and securities markets has been greatly exaggerated. A superb essay by Henry Curr here goes through the detail. This is an oustanding piece of work. If only a few politicians would read it!