Monday, September 12, 2016

Interest Rates Fuel Volatility

Last Friday I posted that rough tides might be ahead. I didn't realize how many people followed me and decided to hit the sell button based on that article! All kidding aside the S&P 500's 2.45% drop was the largest since Brexit. Also the VIX shot up to 20%. Things have calmed down a bit today as the market advances over 1%.

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One noteworthy item is without anyone really noticing Financial stocks(XLF) have started to outperform their rate sensitive cousin Utilities(XLU). It shows the market has slowly been factoring in a rate hike since August.  Lately the rhetoric from the Fed is only fueling the fire.

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