Summary
- The anticipated 0.25% Fed rate cut is likely already priced in, setting up potential for a ‘sell the news’ event.
- I expect institutional money managers are aggressively buying into the year-end rally, especially in large-cap stocks, to catch up on benchmarks.
- A brief, sharp sell-off of up to -5% may occur post-rate cut, triggered by a potential breakout in the 10-year Treasury yield above recent ranges.
- I plan to trim expensive positions, hold 5-7% cash, and buy discounted quality names, like NFLX, SNOW, and DDOG, if the sell-off materializes.
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The Rate Cut May Produce a “Sell the news” Event
The FOMC meeting this week could move the market
This week, on December 10th, it should be no surprise to anyone interested in the stock market that another
Analyst’s Disclosure:I/we have a beneficial long position in the shares of NFLX either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
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