After two days of market rally based on the hope that inflation forces might be subsiding, Target-TGT- reports disappointing earnings before the market opens, and declines almost 25%. At the same time the Dow drops almost 400 points at the opening for trading.
All of sudden market participants wake up to the fact that inflation and supply chain problems leads to rising costs, some of which cannot passed on to consumers.
Is today’s early morning decline just another “buy the dip” opportunity, or is it the beginning of something more serious?
In the past, when the market has had a serious selloff, the Fed’s “Plunge Protection Team” has stepped in to stop the bleeding.
However, with the Fed now on a belt tightening path to contain the serious threat of continued inflation, can they reverse policy?
May 18, 20022