Premarket: Apple is red

apple premarket red 9-21-22From CNBC's "Stock futures flat ahead of the Federal Reserve’s expected interest rate hike" posted early Wednesday:

Stock futures were muted on Wednesday morning as traders look ahead to the upcoming interest rate hike announcement from the Federal Reserve...

Investors expect that on Wednesday, the central bank will deliver its third consecutive 0.75 percentage point rate hike to tame high inflation. A higher-than-expected consumer price index reading in August and hawkish comments on rate hikes from Fed leaders have weighed on stocks, with more pressure likely ahead as the central bank continues to fight inflation.

“We’ll never truly know whether the equity market lows are in for the year without successfully testing the June lows,” said John Lynch, chief investment officer at Comerica Wealth Management in a Tuesday note. “To be sure, the recent technical weakness in stock prices must now contend with the resolve of monetary policy makers in their fight against inflation.”

He added that third-quarter earnings season may also add headwinds for stock prices if they show further margin erosion for U.S. companies.

Investors will also be watching for earnings from Lennar, KB Homes, General Mills and Steelcase Wednesday. Existing home sales will also be released Wednesday morning.

Charts: Yahoo!Finance sees a bullish engulfing line pattern. Max pain stays at $155 with the same call mountain at $160 and a put peak at $150 (up $5).

apple premarket red 9-21-22

4 Comments

  1. Bart Yee said:
    Well, as totally predictable, AAPL was up 1.00 till the Fed made their announcement of a 0.75% rate hike and guidance for further hikes. Then AAPL dropped 3 points to current -2.07 at 11:20am PDT.

    Even though the rate hike was widely expected and some even said was baked in, some traders felt the need to lock in profits (?) or avoid further losses and bailed out, large spike in volume.

    1
    September 21, 2022
    • Adam Stein said:
      Seems like the drop happened long after the .75 was announced; it was more about Powell’s press conference. Bullish market participants were hoping for a signal that Powell was ready to pause rate hikes or saw the end in sight.

      Instead, his remarks focused on the pain ahead; they will keep raising rates until unemployment goes up and inflation comes down. In other words, the Fed needs to, and is trying to, damage the economy to get inflation under control and they’re ready to do it as long as it takes.

      1
      September 21, 2022

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