Investors Are Anxious, and You Can’t Blame ‘Em

Can’t see what’s coming in the market? Join the sea of investors trying to get a peek beyond all the death traps and uncertainties.

Since last Thursday, the S&P 500 is down only 0.2% — not much, considering three bank failures almost took down the US economy.

But you can still sense the anxiety among investors. Over the past week, investors have rushed into market hedges and safer investments — in case more things break in the market.

• Last Friday, volume on put options (used to protect investors from markets going down) broke records.
• This week, strategists saw investors rushing to government bonds for safety (MW).

And on Monday evening, Michael Burry posted this (now deleted):

Is the worst really over? That’s the thing with markets; it’s very difficult to predict events like these. But the odds that we’ll see more of these events will depend on how the Fed reacts.

Next week, the Fed has a tough choice:

• Raise rates further and risk putting the financial system under more pressure, or…
• Stop raising rates and risk inflation running higher, which also puts consumers and businesses under pressure.

What does the market think? The CME FedWatch Tool is pricing in an 79% chance of a 0.25 percentage point hike.

LPL Financial’s Chief US Economist thinks the Fed will raise rates by 0.25% to prioritize price stability (CNBC).

Past ≠ future: Far too often, investors look to past returns when making investment decisions, thinking those returns will be replicated. Here’s why you should resist this trap.

Zuck ain’t playing: Meta (NASDAQ:META) is laying off 10K workers in a second round of mass layoffs. CEO Mark Zuckerberg also warned investors of the potential for long-term economic instability staying for “many years.”

Read to riches: This early retiree, who wasn’t born into money, claims to have retired by 35 with almost $1M saved up — thanks to these **8 books**.

AI can’t be stopped: Google (NASDAQ:GOOGL) is testing artificial intelligence text generation ****for Gmail and Docs — with plans to bring generative AI features to Chat, Meet, Sheets and Slides too.  The law has spoken: Uber (NYSE:UBER) and Lyft (NASDAQ:LYFT) stocks jacked up after a Californian court ruled that drivers will continue to be treated as independent contractors instead of employees.