Tag: The Federal Reserve

Will Santa Be Happy With Yesterday's Rate Increase?

Posted on by The INO.com Team

Before I dive into yesterday's rate increase, I just want to ask you, are you enjoying the 12 Days of Trading Tips? It's always a good thing to refresh your mind and energize yourself by reviewing some of the fundamentals of trading. I think today's trading tip on market timing is one everyone should read as it underscores the old market saying, "Bulls make money, bears make money and pigs get slaughtered."

Yesterday Janet Yellen, Federal Reserve Chairman, finally gave her long-awaited blessing to raise interest rates. It's perhaps the most anticipated rate hike in history and the first jump in almost a decade. I believe that the Fed should have acted months ago and they are still trying to figure out how to clean up the mess they created. Continue reading "Will Santa Be Happy With Yesterday's Rate Increase?" →

Why The Euro Is Rising And Why It Can't Last

Posted on by Lior Alkalay

Lior Alkalay - INO.com Contributor - Forex


For the investors who are watching the Euro, its latest behavior might appear bewildering. After all, the ECB, slightly undershooting expectations, still increased its target asset purchases to roughly €1.5tn. At the same time, the ECB cut the deposit rate to -0.3%. And let's not forget the goings on over on the other side of the Atlantic. There, the Federal Reserve is gearing towards its first rate hike in almost a decade. What, then, could possibly incentivize investors to buy Euros? And can it last?

Draghi's Words Hit a Nerve

When investors expect more central bank easing, they also expect the obligatory rhetoric. But what they hate is when the rhetoric is of a very specific sort. In this case, it is when a central banker stresses the limitations of monetary stimulus. Yet, in practically the same breath, they drive home the need for more government input. And essentially, that is exactly what Mario Draghi said.

Now, when the Fed unleashed similar rhetoric, it was seen as a signal that its ammunition might be running out. Earlier this year, the BoJ had made a similar statement in an attempt to lower expectations of more stimulus. Continue reading "Why The Euro Is Rising And Why It Can't Last" →

Three Industries That Will Suffer From A Fed Rate Hike And Which ETFs Avoid

Posted on by Matt Thalman

Matt Thalman - INO.com Contributor - ETFs


In recent weeks, the likelihood of a Federal Reserve interest rate hike has been increasing. I recently pointed out a few reason on why I believe the Fed will increase rates at the upcoming December meeting, which you can read here. I also have pointed out a few industries that would benefit from a rate hike and which corresponding ETFs that could benefit from such a move by the Fed.

So, today let's take a look at a few industries that will likely suffer from an interest rate increase and which ETFs you may want to avoid if the Fed makes a move. Continue reading "Three Industries That Will Suffer From A Fed Rate Hike And Which ETFs Avoid" →

Three Industries And A Few ETF's That Will Benefit From A Fed Rate Hike

Posted on by Matt Thalman

Matt Thalman - INO.com Contributor - ETFs


Based on economic data and what the Federal Reserve Committee members have been saying over the past few weeks, it would appear the US Central Bank is ready to increase interest rates for the first time since 2006. The Fed has held the benchmark rate near zero since 2008 to help spur economic growth. But with the US economy moving forward, the days of cheap money may be numbered.

I recently wrote about why I believe the Fed will raise rates at the December Fed meeting so today I would like to point out a few industries that could benefit from a rate increase and some ETF'S that focus on those industries. Continue reading "Three Industries And A Few ETF's That Will Benefit From A Fed Rate Hike" →

Fed Watch: December Rate Hike Likely Based on Fed Official's Language

Posted on by Matt Thalman

Matt Thalman - INO.com Contributor - ETFs


Over the past few weeks, the likelihood of a December rate hike by the Federal Reserve Bank has grown substantially. Both economic data and hints from a number of Federal Reserve policymakers now point towards a December rate hike and now on Wall Street 70% of investors polled believe a rate hike in December is possible. So let us take a look at the data and what Fed officials are saying that is making investors believe a hike is coming.

Data

One of the most compelling data points is the October jobs number. Expected to come in at 185,000, but blew that figure out of the water when actually coming in at 271,000. The unemployment rate fell to 5%, from 5.1% and average hourly earnings rose 0.4% for the month. Furthermore, the increase in pay on a year-over-year basis was 2.5%, the highest increase the jobs market has seen since July 2009. Continue reading "Fed Watch: December Rate Hike Likely Based on Fed Official's Language" →