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It was an ugly finish for US stocks as heavy selling hit in the final half hour of trade to extend the decline in the S&P 500 to 1%.
- S&P 500 -45 points to 4532
- Nasdaq Comp -1.1% (now down 10.7% from the Nov 19 high)
- Russell 2000 -1.2%
- DJIA -1.0%
The S&P 500 closed right at the December 20 low:
- Despite omicron wave, oil demand rose in Q4 2021 by 1.1 mil bpd to 99 mil bpd
- But supply will soon overtake demand as some producers set to pump at or above all-time highs
- Steady rise in supply could see significant surplus in Q1 2022 and going forward
- US, Canada, Brazil set to pump at all-time highs for the year
- Russia and Saudi could also break their output records
The Bloomberg economist says:
- Our in-house model of a Fed reaction function — the Bloomberg Economics rule (“BE rule”) — suggests that a 50 basis-point rate hike at the March meeting is warranted, followed by another five 25 basis-point rate hikes the rest of the year.
Maybe 50bps is warranted, maybe it isn’t. The Fed is still doing QE on a massive scale. they will not hike by 50bps in March (IMO anyway).