by David Kranzler
Investment Research Dynamics
Federal Reserve intervention has killed natural market processes. The Fed is also starting to lose control of its ability to manipulate the markets. Today is a good example. The S&P and Dow are negative as I write this (2:30 EST) after staging a big early day rally. Most sub-indices, like retail and housing, are also red. BUT, the infamous “FANG” (Facebook, Amazon, Netflix, Google) stocks + Apple are up anywhere from .2% (AMZN) to over 3% (AAPL). These stocks are the largest stocks in the SPX by market-cap and are part of the “tool kit” the Fed has been using to keep the S&P 500 and Dow from spiraling lower.
Since late 2012, the Fed has been able to orchestrate the markets with heavy doses of direct and indirect interventionary tactics. It’s used a combination of money printing, plunge protection and propaganda to keep the stock market propped up, interest rates near zero and the price of gold suppressed.