In addition to the comments from Fed Chair Powell, and their lack of understanding about inflation, another reason stocks were looking lower before the open is the shocking earnings guidance from Restoration Hardware (RH).  The CEO cited mortgage rates doubling, luxury home sales down 18% and the Fed forecast to hike rates another 175 basis points.

 We are getting a bunch of warnings and also layoff announcements. That’s what the Fed is trying to do – harm the economy and make people poorer or afraid to spend money.

But what makes the market special is it is supposed to see stuff like the RH news long before it’s announced.

RH 52-week high is $744, and it closed yesterday at $237 – 68%.  I feel today’s reaction is pure emotions. At some point, this much bad news is baked in the market, and we will be looking to capitalize.  You don’t want to catch falling daggers, but the market has factored in a ton of bad news.  

On that note, we saw bullishness edge back above 20%...

…but they did dump domestic equity funds this past week.  In fact, they dumped everything, adding up to $37 billion.

I know Wall Street wants to see retail investors bail out down here, but I think long term investors should be nibbling.  Heck if you sold down here who would be buying?

Hint: not your next-door neighbor.

There is still some work to do, and more bad news to be “shocked” about, but this market has done a lot of repricing already.  Meanwhile, Powell and Co should be proud because more and more people are getting fired.

It’s the theater of the macabre.  The Federal government tried to buy votes.  And a year later, you can’t afford a July 4^th cookout, and so, the Fed tries to make you less wealthy.