Latest In Markets - Jerome Powell Re-appointed
The Biden administration announced that Jerome Powell will serve a second term as FOMC Chair, while Lael Brainard, the front runner to replace Powell, will serve as vice chair. The widely held belief is that Lael Brainard has a more dovish monetary policy stance than Powell.
Markets, unsurprisingly, reacted hawkishly to this news, with:
· Front-end rates moving higher
· Gold selling off
· New highs in the U.S. Dollar
· Significant dispersion in the equity market, with value leading growth, and continued extreme selling in what most would consider “long duration” equities despite U.S. indices at/near all time highs.
o “Expensive Software” -6.4% / -4.1 SD
o “Non-Profitable Tech” -5.3% / -2.8 SD
o “Recent Liquid IPO’s” -4.75% / -2.9 SD
o “Metaverse Stocks” -4.2% / -3.2 SD
o “Secular Growth” -2.88% / -2.8 SD
o “US Internet Retail” -4% / -2.8 SD
The Bottom Line
This was certainly an interesting and unusual day in markets. Have any questions? Feel free to reach out to Gary@invariantinvestments.com.