Breaking Wall Street Market News & Reports

The U.S. central bank was getting back to business as usual by hiking the rate it charges for rarely used emergency loans to banks on Thursday, not warning consumers and businesses to brace for costlier credit. In an unprecedented move, the “discount rate” changes from .50% to .75% effective Friday. The modifications are not expected to lead to tighter financial conditions for households and businesses and do not signal any change in the outlook for the economy or for monetary policy, said the Fed. Please keep in mind this is separate from the Federate Funds rate which currently stands at .10%. Is the beginning of tighter fiscal policy? What will this mean to the markets tomorrow and next week? Is this considered a bullish move or are the bears going to capitalize and throw more wood to the fire?

This can both be looked at bullish and bearish in more ways than one. I anticipate both the bulls and bears to go on an all out tug of war on this information. Though I must admit the bears have the upper hand as they are capitalizing on this move as negative. Futures as I write this, point to -60 to the DOW, oil futures dropping -1.3%, dollar making a huge 1% gain against the Euro, and Asia trading significantly lower with Europe likely to follow. Is this the catalyst that takes us lower and break the current 3 day uptrend. All indices are currently sitting on the 150 day moving average which may signify an indecisive direction. Next leg may bring us lower and break all technicals and warrant the +10% loss this YTD. This move may be looked upon as a rush to tighten which has caught Wall Street and investors off guard.

The bulls however argue that is a sign of confidence that the economy is strong enough to stand on its own. Time will tell.

No fear, here at Wall Street Grand, we like to educate our investors to become better investors with the intention to reap huge rewards! How can you capitalize on this move? Would you believe me that there’s a fund that bets on the interest rates rising? TBT is our answer. Please take advantage of this, as this complements our Gold picks. It’s inevitable that rates will begin to rise as I anticipate the Fed to raise the “fed fund rate the 2nd half of this year. TLT is the bull version of interest rates when Fed lowers rates. Please see charts below.

ACE