Day Traders Diary

9/8/22

The major averages rose Thursday after moving between gains and losses as Wall Street weighed Federal Reserve Chair Jerome Powell's comments on the central bank continuing to fight inflation. The Dow Jones Industrial Average jumped 192 points, or 0.61%. The S&P 500 rose 26 points or 0.66% while the Nasdaq Composite advanced 70 points or 0.60%.

Earlier, stocks slid during a Q&A session from Powell at the Cato Institute where he reiterated that the central bank will do what it takes to fight inflation. He also signaled that a pause in rate hikes or a pivot to cutting interest rates is not coming soon.

"History cautions strongly against prematurely loosening policy," he said. "I can assure you that my colleagues and I are strongly committed to this project and we will keep at it until the job is done."

The European Central Bank early Thursday morning hiked interest rates by 0.75 percentage point, raising its deposit to 0.75% from zero, in a largely expected move to tamp down inflation.

Later in the morning, stocks reversed earlier losses in an attempt to continue a solid rebound. On Wednesday, the major averages posted their best day since Aug. 10, with the Nasdaq snapping a seven-day losing streak.

Still, stocks remain in a downtrend overall as concerns about a slowing economy and further rate hikes from the Federal Reserve are pushing some investors away from riskier parts of the market.

"I think we have a nervous market in a pre-CPI week," said Art Hogan, chief market strategist at B. Riley Financial, pointing to the August consumer price index report set to be released Sept. 13. "We're probably going to shift into a wait and see mode."

Nomura, Goldman and Bofa forecast 0.75 percentage point rate hike in September

Economists at Nomura just changed their forecast for the Federal Reserve's rate hike, now anticipating a 0.75 percentage point increase instead of a 0.50 percentage point one.

Goldman Sachs and Bank of America have the same estimate for September. It's also what markets have currently priced in - traders see an 86% chance of a 0.75% rate hike in September according to the CME Group's Fed watch tool. That's up from a 77% chance one day ago.

Some individual stocks that moved today.

GameStop – Shares of video game retailer rose 4% after the company disclosed a new partnership with cryptocurrency exchange FTX in its quarterly update.

Rivian Automotive - Rivian shares popped more than 6% after the electric-vehicle startup and Mercedes announced they were planning a joint venture to build electric commercial vans for both brands in Europe.

Snap — Shares of the social media company jumped more than 8% after the Verge reported that CEO Evan Spiegel broke down a turnaround plan in an internal memo

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