The Fed rate decision was hawkish on the surface but then perceived as more dovish after Chairman Powell spoke. Raise rates now but lower them later. NASDAQ stocks led the way, ripping over 2% on the day. The Dow, S&P 500 (SPY) and Russell 2000 all put in solid performances as well. The 10-year and 30-year Treasury yields did head higher, but remained well below the recent highs. Read on below to find out more….(Please enjoy this updated version of my weekly commentary published December 15th, 2021 from the POWR Options newsletter).
The NASDAQ 100 continues to be the big out-performer over the past 6 months, up nearly 25% in that time frame. The S&P 500 has gained a very respectable 19% in the past half year while the Russell 2000 is slightly negative over the same period. How long this massive out-performance can last is anyone’s guess.
Implied Volatility (IV) headed sharply lower following the Fed meeting. The VIX now stands at just under 20 and is back within the regime of volatility bounded by 16 to the downside and 22 to the upside. I expect a slow creep lower into year-end, barring any major surprises.
