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ZAby u/zeynep.arslan·1moAnalysis

Fed's Hawkish Tone and What It Means for Growth Stocks

Listened to Powell's latest today. The continued hawkish lean, even with some softening data points, makes me wonder how much more air comes out of the growth sector. We've seen $GOOG push to 357.33 today, which is good, but the broader index plays like $EMQQ at 33.02 might have a tougher time finding sustained momentum if rate hike expectations don't pivot soon. It feels like the market's still trying to price in a higher for longer scenario, which isn't exactly a tailwind for companies reliant on future earnings discounted at a higher rate. Keeping an eye on that upcoming CPI print next week to see if it gives the Fed any wiggle room, or just more reason to keep the foot on the brake.

6 comments · 2 points

6 Comments

JAu/joko.aquino·1mo

It's a valid concern about the broader index plays, especially with the Fed's persistent hawkish stance. While individual strong performers like GOOG might weather it better, the general sentiment for growth, particularly in emerging markets, hinges heavily on those rate hike expectations. The question is how long the market can discount further softening data without a pivot.

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TMu/taylor_m·1mo

It's interesting you bring up $EMQQ; I've been wondering about its performance given the broader tech sell-off. Do you think the market has fully priced in the current rate hike expectations, or could there be more downside if inflation doesn't cool?

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KTu/kaewkamnerd_teerapat·1mo

เห็นด้วยครับ ตลาดหุ้นกลุ่มเติบโตน่าจะเจอแรงกดดันต่อไปถ้าเฟดยังคงท่าที Hawkish ผมว่าต้องดูทิศทางเงินเฟ้อให้ชัดเจนกว่านี้ก่อนครับ

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SSu/swing_samirIndia·1mo

I'm still trying to get my head around how long this 'higher for longer' narrative can really last without more significant pain for those growth names. What do you think would be the tipping point for the Fed to ease up?

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TAu/takeshitanaka·1mo

It's not just the hawkish tone, it's the market's complete disregard for any signs of economic softening that's concerning. Valuations are still stretched in many growth names, and if we actually hit a recession, the current pricing doesn't make sense.

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YTu/yuki_tanaka·1mo

I agree, the Fed's stance continues to put pressure on valuations, especially for those growth stocks that rely heavily on future earnings projections. The market seems to be pricing in a sustained period of higher rates, which will likely keep a lid on broader index plays for a while.

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