FOMC Vows Three Rate Hikes in 2022, U.S. Markets Close Higher

by Vlad Karpel

Following today’s Federal Open Market Committee meeting and comments from Fed Chair Jerome Powell, all three major U.S. indices traded impressively higher, booking their best single-day gains in recent sessions. The speedier reduction of its monthly asset purchases and elevated inflation were discussed as the Fed vowed to more aggressively normalize monetary policy to subvert inflation. Three rate hikes are expected in 2022 as the bond-buying program will continue to decrease. With the hawkish outlook from the Fed, investors will monitor additional motions to stabilize rapidly increasing inflation.

The omicron variant remains prominent in the news as the spread continues to grow at an alarmingly quick rate. Global travel restrictions and State-issued COVID mandates are causing some concern as the year winds down while vaccine and booster expansion is causing some optimism as they appear effective against the latest variants.

VIX receded from its previous extreme level, returning to $24

November retail sales came in below expectations but still advancing while home builders’ growth advanced once again last month. The $VIX receded from its previous extreme level, returning to $24. Omicron virus, the inflation CPI numbers, the Fed’s statement this week, can impact the next move in the market. FDX, LEN, and ADBE are key earnings announcements this week that can potentially influence the market direction.

We’re watching the vital support levels in the SPY, which are presently at $462 and then $454 (a low-probability event at this time.) We expect the market to drop this week before rebounding toward the end of December. Globally, both European and Asian markets closed with mixed results. We encourage all market commentary readers to maintain clearly defined stop levels for all positions. For reference, the SPY Seasonal Chart is shown below:

Key U.S. Economic Reports/Events This Week:

  • Producer Price Index (November) – Tuesday
  • Retail Sales (November) – Wednesday
  • Import Price Index (November) – Wednesday
  • Business Inventories (October) – Wednesday
  • Federal Reserve FOMC Announcment – Wednesday
  • Fed Chair Jerome Powell Press Conference – Wednesday
  • Weekly Jobless Claims (12/11) – Thursday
  • Building Permits (November) – Thursday
  • Industrial Production Index (November) – Thursday
  • Capacity Utilization (November) – Thursday

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For reference, the S&P 10-Day Forecast is shown below:

Using the “^GSPC” symbol to analyze the S&P 500 our 10-day prediction window shows a near-term mixed outlook. Prediction data uploaded after the market closes at 6 p.m. CST. Today’s data is based on market signals from the previous trading session.

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Thursday Morning Featured Symbol

Our featured symbol for Thursday is JP Morgan Chase (JPM). JPM is showing a steady vector in our Stock Forecast Toolbox’s 10-day forecast.

The symbol is trading at $157.94 with a vector of -0.31% at the time of publication.

10-Day Prediction data is uploaded after the market close at 6 p.m., CST. Today’s data is based on market signals from the previous trading session.

Note: The Vector column calculates the change of the Forecasted Average Price for the next trading session relative to the average of actual prices for the last trading session. The column shows the expected average price movement “Up or Down”, in percent. Trend traders should trade along the predicted direction of the Vector. The higher the value of the Vector the higher its momentum.

*Please note: At the time of publication Vlad Karpel does have a position in the featured symbol, jpm. Our featured symbol is part of your free subscription service. Not included in any paid Tradespoon subscription service. Vlad Karpel only trades his money in paid subscription services.  If you are a paid subscriber, please review your Premium Member Picks, ActiveTrader, or MonthlyTrader recommendations. If you are interested in receiving Vlad’s picks, please click here.


Oil

West Texas Intermediate for Crude Oil delivery (CL.1) is priced at $71.45 per barrel, up 1.02% at the time of publication.

Looking at USO, a crude oil tracker, our 10-day prediction model shows mixed signals. The fund is trading at $51.44 at the time of publication. Prediction data uploaded after the market close at 6 p.m., CST. Today’s data is based on market signals from the previous trading session.


Gold

The price for the Gold Continuous Contract (GC00) is up 0.28% at $1777.30 at the time of publication.

Using SPDR GOLD TRUST (GLD) as a tracker in our Stock Forecast Tool, the 10-day prediction window shows mixed signals. The gold proxy is trading at $167 at the time of publication. Vector signals show +0.28% for today. Prediction data uploaded after the market close at 6 p.m., CST. Today’s data is based on market signals from the previous trading session.


Treasuries

The yield on the 10-year Treasury note is down, at 1.414% at the time of publication.

The yield on the 30-year Treasury note is down, at 1.801% at the time of publication.

Using the iShares 20+ Year Treasury Bond ETF (TLT) as a proxy for bond prices in our Stock Forecast Tool, we see mixed signals in our 10-day prediction window. Prediction data uploaded after the market close at 6 p.m., CST. Today’s data is based on market signals from the previous trading session.


Volatility

The CBOE Volatility Index (^VIX) is $20.31 at the time of publication, and our 10-day prediction window shows mixed signals. Prediction data uploaded after the market close at 6 p.m., CST. Today’s data is based on market signals from the previous trading session.


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