The DC Today - Wednesday November 2, 2022
The Dividend Cafe
The Dividend Cafe - The Bahnsen Group
4.9 • 572 Ratings
🗓️ 2 November 2022
⏱️ 12 minutes
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Summary
I would have to go back and look at the exact shape but I believe the market action today was quite identical to the last time the Fed announced a known rate hike, where the market bad been down, rallied huge to the upside on the news, sold off substantially, rallied all the way back, then sold off into the close with no new news. It’s all just so, so dumb. But I have more to say than that here …
MARKET ACTION
Dow: -505 points (-1.55%) S&P: -2.50% Nasdaq: -3.36% 10-Year Treasury Yield: 4.09% (+4 basis points) Top-performing sector: Utilities (-1.02%) Bottom-performing sector: Consumer Discretionary (-3.79%) WTI Crude Oil: $89.35/barrel (+1.11%) Key Economic Point of the Day:
ADP private sector number came in at +239k for October vs. 198k expected. BLS jobs report is Friday
Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com
Transcript
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| 0:00.0 | Welcome to the DC Today, your daily market synopsis of the Dividing Cafe, brought to you every Monday through Thursday to bring you up-to-date information and perspective on financial markets. |
| 0:14.8 | Well, hello and welcome to Fed Day in the DC today. I have just returned to my hotel room to record this briefly and then |
| 0:22.7 | I'm heading off to a dinner event and we'll be back in the Newport office tomorrow to bring |
| 0:27.0 | you another DC today on Thursday. It's uncanny the deja vu of today. The market was down most of the |
| 0:35.8 | morning, but not a ton, but it was it was down over 100 points. |
| 0:39.4 | Then the Fed announcement came that they were hiking rates, 75 basis points, just like the last meeting, just like the, you know, three before today. |
| 0:49.0 | And that just like had been priced in 100% more or less in the futures markets. |
| 0:53.9 | And then immediately markets bounced up almost 500 points. just like had been priced in 100% more or less into futures markets. |
| 0:58.3 | And then immediately markets bounced up, almost 500 points. |
| 0:59.6 | They were up over 300. |
| 1:00.9 | They had been down over 100. |
| 1:07.7 | And then over the next hour and a half, you had a bunch of up and down volatility. At one point, the market had gone up over 300, then down a few hundred, |
| 1:13.6 | then back up again, and then it closed down 505 points. And so you just had this massive |
| 1:20.8 | volatility. And I've explained over and over what causes it. And it's just about as dumb as |
| 1:26.3 | anything I even know how to comment on. But it did |
| 1:30.4 | we do selling into the final hour with accelerated selling in the final 20 minutes. The S&P was down |
| 1:38.7 | 2.5%. The Dow was down 1.5%. The NASDAQ was down almost 3.5%. So obviously, the quote-unquote, long |
| 1:46.5 | duration stocks were hit most and the short duration stocks hit much less. But even then, |
| 1:52.5 | utilities was the best performing sector on the day and it was still down 1%. But consumer discretionary |
| 1:58.5 | was down again, another 3.79. |
| 2:02.9 | So people who want to argue, well, this, the market went down because of Fed tightening |
| 2:09.9 | would probably have to explain whether the initial response to Fed tightening was about a 500-point rally from the downside to the low side. There was just an |
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