BARSTOOL FINANCE: You hear that, Ed? BEAR MARKETS

Sunday: *Tyler and Large launch The Family Office to invest their own money for your entertainment*

Monday: *S&P 500 enters bear market*

Sure, we got bent over without so much as a courtesy spit yesterday. But look on the bright side: given his age and current market conditions, national treasure Michael “Large” McCarthy will probably have to delay retirement by 3-4 years. So we’ve got that going for us.

Now back to the unwanted prison sex…

Yesterday the S&P 500 dropped almost 4% and closed in a bear market. Technically it dipped into bear market territory a few weeks back, but, to borrow a bar from Kanye, I ain't here to argue about his facial features.

WTF is a bear market? 

According to Investopedia…

“Bear markets occur when prices in a market decline by more than 20%, often accompanied by negative investor sentiment and declining economic prospects.” 

And it checks out: the S&P is indeed down 20% from its recent highs… and pretty much everyone has become a Buzz Killington.

Markets imploding is nothing new in the year of our Lord 2022. The only difference is now we can put a label on it. The economic equivalent of the “so, what are we? conversation.”

So, where did we go wrong?

In case you’re just waking up from a coma, inflation is out of control. At last check (according to a report on Friday) prices in the US rose 8.6% in May vs. a year ago. Economists were expecting 8.3%. Spoiler: either way, that’s a fuck ton. The Fed’s “goal” is 2%.

To get it under control (…hopefully) the Federal Reserve has a few weapons at its disposal. One of which is hiking interest rates, which it’s already done a few times this year. 

The problem? Because inflation doesn't show any signs of slowing, and actually came in higher than expected, the Fed may need to go nuclear.

Translation? J-Poww and the rest of the financial illuminati could hike rates even more than most investors had expected (0.75% vs. 0.50%) when they meet on Wednesday.

That’s nightmare fuel for markets which had largely “priced in” a 0.50% hike. You see, markets like surprises and rate hikes about as much Saudi Arabia likes hard-hitting journalism and the truth. Hence, the massive selloff yesterday (and Friday).

All investor’s eyes will be on the Fed rate announcement and J-Poww’s post-meeting presser tomorrow afternoon. MUST. SEE. TV.

God speed.

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