The FOMC rate decision on Wednesday was as expected with a 50 bps hike. However, the summary of economic projections dot plot showed a higher path of interest rates that would be held for longer. The peak rates projected by the Fed is now a median of 5.1% for 2023, and two members still had rates above 5% for 2024 in a sign that the Fed is not yet convinced it has won the battle against inflation. These higher projections were more than the market was expecting and resulted in stocks selling off.
This time of the year typically sees a so-called ‘Santa Rally’ on stocks, but the environment is not suitable if the Fed is looking at being more aggressive. So, is this a time to look for selling stocks instead?
Seasonax helps you find stocks with weak phases as well as strong ones. For example, Gilead Sciences has a weak phase at the moment. From December 16 through to December 30, Gilead Sciences stock has fallen 8 times over the last 10 years with an average return of 1.72% for sellers. So, is a short for Gilead Sciences worth considering?
Major Trade Risks: The main risk here is that there is some positive news for Gilead Sciences or the core US PCE print next week is really weak and encourages investors to believe the Fed’s work is done.
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