Do note that after 2am SGT, there could be a huge swing in price for all stocks
TLDR: if interest rate hike is only 0.25% or 0.5%, we can see a huge upswing in stock price. But if it is more than 0.75%, get ready to see a sea of red. If you are trading (be it long or short) be ready for huge volatility.
Explaination
The fed is announcing the interest rate hike at 2am SGT (2pm ET). When interest rate goes up price of stocks will drop, and vice versa. Why? I'll explain it in another post but for now just believe me![]()
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On Monday the stock market crashed because the market is expecting the interest rate to go up by 0.75% or more, because inflation is at all time high. Currently, most analyst believe that the market had price in interest rate hike of around 0.75%.
So why does it matter to you?
you can think of this 0.75% as a benchmark. If the rate hike is less than that, you will see the market goes up. The closer it is to 0, the higher the stock price will go. But if the number is higher than 0.75%, then stock price will go down. The higher the number, the lower the stock price will go.
So for those who are trading today, you are technically betting on what is the figure the fed is going to announce today. It is like a game of high and low, where you are betting if the number will be higher or lower than 0.75%.
So for those who are shorting, do be careful. Same with those who are trading options. High volatility is great for trading as you can win big but that also means you could lose big.
trade safe![]()
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Source
https://finance.yahoo.com/news/fed-fomc-monetary-policy-decision-june-2022-120337242.html
$Grab Holdings (GRAB.US)$ $NIO Inc (NIO.US)$ $Palantir (PLTR.US)$ $Tesla (TSLA.US)$ $ContextLogic (WISH.US)$ $AMC Entertainment (AMC.US)$ $GameStop (GME.US)$
Explaination
The fed is announcing the interest rate hike at 2am SGT (2pm ET). When interest rate goes up price of stocks will drop, and vice versa. Why? I'll explain it in another post but for now just believe me
On Monday the stock market crashed because the market is expecting the interest rate to go up by 0.75% or more, because inflation is at all time high. Currently, most analyst believe that the market had price in interest rate hike of around 0.75%.
So why does it matter to you?
you can think of this 0.75% as a benchmark. If the rate hike is less than that, you will see the market goes up. The closer it is to 0, the higher the stock price will go. But if the number is higher than 0.75%, then stock price will go down. The higher the number, the lower the stock price will go.
So for those who are trading today, you are technically betting on what is the figure the fed is going to announce today. It is like a game of high and low, where you are betting if the number will be higher or lower than 0.75%.
So for those who are shorting, do be careful. Same with those who are trading options. High volatility is great for trading as you can win big but that also means you could lose big.
trade safe
Source
https://finance.yahoo.com/news/fed-fomc-monetary-policy-decision-june-2022-120337242.html
$Grab Holdings (GRAB.US)$ $NIO Inc (NIO.US)$ $Palantir (PLTR.US)$ $Tesla (TSLA.US)$ $ContextLogic (WISH.US)$ $AMC Entertainment (AMC.US)$ $GameStop (GME.US)$
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LetSgo001 : True... 0.25 or 0.5 are likely - re:cpi data; 0.75 or 0.1 are more likely
doctorpot1 OP LetSgo001 : yea based on probability 0.25 and 0.5 is unlikely and that's why market priced in 0.75. but if J Pow surprise us today with 0.5 or 1.25, there will be a lot of pain for some hahahhahaha![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
so just want traders today to remember to trade safe and see if the potential for huge volatility is something they can stomach.
Vincent 1 LetSgo001 : Yes, because the cpi data this time makes me think 0.75 or more
456632345 : There's a good chance it's the 75 people are predicting
doctorpot1 OP Vincent 1 : I think so too. But the fed did surprise us quite a few times already![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
doctorpot1 OP 456632345 : I think so too but they did surprise us a few times already. not sure if there will be more surprises![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
Vincent 1 doctorpot1 OP : The big meal he gave you this time may be 1%.
Stirling : Shouldn't a 0.75% rate hike be seen to be better, so the Fed can nip the inflation bud ASAP and remove the prolonged uncertainty of slow rate hikes?
doctorpot1 OP Vincent 1 : It could be 1.5%.![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
doctorpot1 OP Stirling : I agree that he should have raise interest rate higher, but earlier in the years. He delayed the rate hike too long. Now I think J Pow is trying to not cause a recession by his rate hike. If he raise interest rate too fast now it can cause a recession. A lot of big companies are already firing people already![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
plus a high inflation, that will be a stagflation. it is the worse case scenario. So he have a tough time balancing it now because he made the wrong moves earlier on.
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