Fed Rates - Kept Same On Thursday?

Fed Rates - Stocks Rally On Election Day

With the 0.63% rally in the S&P 500 on Tuesday, the stock market is only down 6% from its September peak. It is up 3.06% year to date.

This rally continues to vindicate my short term bullishness. I’m still bullish in the short term. CNN Fear and Greed index is at 11 out of 100 which indicates extreme fear. That’s up from 9 on Monday.

One or two more positive days should take us out of the extreme fear category. That's as long as there isn’t volatility throughout the day. Then my intermediate term bearishness will determine my opinion on stocks

Nasdaq increased 0.64% and Russell 2000 increased 0.55%. VIX was down 0.25% to 19.91. Every sector increased.

Best performers were industrials and materials which were up 1.1% and 1.51%. Worst sector was energy which was up 0.34%.

That makes sense because oil plunged 1.4% on Tuesday. It is down 7 straight days and briefly entered a bear market.

Oil fell because America allowed Iran’s oil customers to keep importing its oil without violating American sanctions. Weaker sanctions on Iran combined with a weakening global economy spell doom for oil. Last month it peaked at $76.90. Now it is at $62.21.

As you can see from the chart below, the put to call ratio is the highest since the 2016 presidential election.

This is partially because of the correction and partially because of the midterm elections. I don’t anticipate any volatility after the election. But investors thought it was a good idea to hedge their portfolios just in case something negative happens.

Fed Rates - Zillow Stock Craters After Hours

With the weakness in the housing market, it’s no surprise Zillow had a disappointing report. It caused its stock to crash after hours. Zillow reported 17 cents in EPS. That's in the middle of the range of 6 estimates which were between 15 cents and 20 cents. That is down from 19 cents last year.

Catalysts of the 18.98% decline after hours were weak revenues and guidance. The firm reported revenues of $343.09 million which missed estimates for $344.19 million. It issued 2018 revenue guidance between $1.307 billion and 1.324 billion. That missed estimates for $1.34 billion.

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