Fed carnage continues to drive most markets down. The table below shows four key categories and how they have performed since July 26, the day before the Fed’s first rate hike. Not surprisingly, bonds have been clobbered and tech is not far behind. Gold is beginning its rise on dollar weakening and fears of continued inflation. The Dow Jones Industrials appears to have benefitted from investors moving money from bonds and higher-risk tech stocks to more stable, less risky companies.
Week Ending December 23, 2022
| ASSETS | 7/26/2022 | This Week | From 7/26 |
| DJIA | $31,764.00 | $33,204.00 | 4.5% |
| GOLD (GLD) | $160.00 | $167.26 | 4.5% |
| TECH (QQQ) | $294.30 | $267.26 | -9.2% |
| BONDS (TLT) | $116.84 | $102.16 | -12.6% |
The Fed is in a pickle of its own making. There is no easy way out of this problem short of a serious recession (if not worse). The Fed, in an effort to maintain what little credibility it has left, is likely to continue to raise interest rates until something breaks. Until that happens, GLD should continue to rise and Tech and Bonds should continue to fall. It is likely that the DJIA will begin to decline under such circumstances.
Be very cautious. These are very dangerous markets!
