Stock Market Tanks Nearly 400 Points As Investors Brace For Worst Week of the Year

The Dow traded off 400 points in Friday’s morning session as investors reacted to the fear of interest rate hikes far sooner than the late 2023 estimate given by the Fed on Wednesday.

Fed Governor James Bullard told CNBC a rate hike could be coming as early as late 2022 as the Fed tries to manage the increasingly hot inflationary numbers in the economy.

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The reality is this: late 2023, late 2022 — all of these “estimates” are irrelevant. The Fed, and its governors, would be wise to stay quiet. It’s all meaningless until it happens — and we need a normal push-pull, buy-sell, in our market place.

By “telegraphing” too much, the Fed makes investors too dependent on Fed speak. Thereby making it increasingly challenging for them to evaluate the FUNDAMENTALS of this market.

Imagine that… fundamentals.

When the S&P is trading at 45 times earnings, compared to the historical average of 15 times earnings, it is quite clear that investors have given up on so-called fundamentals. And that’s a problem.

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