Wall Street Greek: Stocks Crushed by Black Swan of the Fed’s Own Making

Earlier this week, when we examined the potential impact of the Federal Reserve Chairwoman’s testimony before Congress, we anticipated a negative result. However, that was based on the expectation for professionalism and diplomacy (read non-committal responses) about the possibility of a softening of Fed monetary tightening plans. Unfortunately, because of intensifying publicity around a nuance to this year’s stress testing for banks, congressional members have instead repeatedly asked Chair Yellen about the possibility of negative interest rate policy action by the Fed. It is my view that professionalism and diplomacy should have been pushed aside at that moment, and the Fed Chair should have clearly stated that while it was being studied due to its use in other major regions of the world, it would not be appropriate now (and possibly ever) for the U.S. and is highly unlikely. However, Fed Chair Yellen’s diplomatic responses to questions about negative rates have effectively scared the heck out of the market about exactly what might require the Fed to dramatically reverse course. Exactly what does the Fed know or see that concerns it? The Fed now has a black swan wreaking havoc to financial markets to deal with, and it is a shame that it is of its own making. See the full report on Stocks and the Black Swan of the Fed's Own Making.

Security Sector	02-11-16 1:45 PM ET
SPDR S&P 500 (NYSE: SPY)	-1.7%
SPDR Dow Jones (NYSE: DIA)	-2.1%
PowerShares QQQ (Nasdaq: QQQ)	-0.8%
iShares Russell 2000 (NYSE: IWM)	-1.2%
Vanguard Total Stock Market (NYSE: VTI)	-1.7%
Financial Select Sector SPDR (NYSE: XLF)	-3.0%
Technology Select Sector SPDR (Nasdaq: XLK)	-0.9%
Energy Select Sector SPDR (NYSE: XLE)	-2.7%
Health Care Select Sector SPDR (NYSE: XLV)	-2.0%
Consumer Discretionary Select Sector SPDR (NYSE: XLY)	-0.7%
Consumer Staples Select Sector SPDR (NYSE: XLP)	-0.9%
Utilities Select Sector SPDR (NYSE: XLU)	-1.3%
Materials Select Sector SPDR (NYSE: XLB)	-2.5%
Industrial Select Sector SPDR (NYSE: XLI)	-2.7%
iPath S&P 500 VIX ST Futures (NYSE: VXX)	+7.8%
SPDR Gold Trust (NYSE: GLD)	+4.4%
United States Oil (NYSE: USO)	-2.0%

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only. Article should interest investors in SPDR Dow Jones Industrial Average (NYSE: DIA), SPDR S&P 500 (NYSE: SPY), PowerShares QQQ Trust (Nasdaq: QQQ), ProShares Short Dow 30 (NYSE: DOG), ProShares Ultra Short S&P 500 (NYSE: SDS), ProShares Ultra QQQ (NYSE: QLD), NYSE Euronext (NYSE: NYX), The NASDAQ OMX Group (Nasdaq: NDAQ), Intercontinental Exchange (NYSE: ICE), E*Trade Financial (Nasdaq: ETFC), Charles Schwab (Nasdaq: SCHW), Asset Acceptance Capital (Nasdaq: AACC), Affiliated Managers (NYSE: AMG), Ameriprise Financial (NYSE: AMP), TD Ameritrade (Nasdaq: AMTD), BGC Partners (Nasdaq: BGCP), Bank of New York Mellon (NYSE: BK), BlackRock (NYSE: BLK), CIT Group (NYSE: CIT), Calamos Asset Management (Nasdaq: CLMS), CME Group (NYSE: CME), Cohn & Steers (NYSE: CNS), Cowen Group (Nasdaq: COWN), Diamond Hill Investment (Nasdaq: DHIL), Dollar Financial (Nasdaq: DLLR), Duff & Phelps (Nasdaq: DUF), Encore Capital (Nasdaq: ECPG), Edelman Financial (Nasdaq: EF), Equifax (NYSE: EFX), Epoch (Nasdaq: EPHC), Evercore Partners (NYSE: EVR), EXCorp. (Nasdaq: EZPW), FBR Capital Markets (Nasdaq: FBCM), First Cash Financial (Nasdaq: FCFS), Federated Investors (NYSE: FII), First Marblehead (NYSE: FMD), Fidelity National Financial (NYSE: FNF), Financial Engines (Nasdaq: FNGN), FXCM (Nasdaq: FXCM), Gamco Investors (NYSE: GBL), GAIN Capital (Nasdaq: GCAP), Green Dot (Nasdaq: GDOT), GFI Group (Nasdaq: GFIG), Greenhill (NYSE: GHL), Gleacher (Nasdaq: GLCH), Goldman Sachs (NYSE: GS), Interactive Brokers (Nasdaq: IBKR), INTL FCStone (Nasdaq: INTL), Intersections (Nasdaq: INTX), Investment Technology (NYSE: ITG), Invesco (NYSE: IVZ), Jefferies (NYSE: JEF), JMP Group (NYSE: JMP), Janus Capital (NYSE: JNS), KBW (NYSE: KBW), Knight Capital (NYSE: KCG), Lazard (NYSE: LAZ), Legg Mason (NYSE: LM), LPL Investment (Nasdaq: LPLA), Ladenburg Thalmann (AMEX: LTS), Mastercard (NYSE: MA), Moody’s (NYSE: MCO), MF Global (NYSE: MF), Moneygram (NYSE: MGI), MarketAxess (Nasdaq: MKTX), Marlin Business Services (Nasdaq: MRLN), Morgan Stanley (NYSE: MS), MSCI (Nasdaq: MSCI), MGIC Investment (NYSE: MTG), NewStar Financial (Nasdaq: NEWS), National Financial Partners (NYSE: NFP), Nelnet (NYSE: NNI), Northern Trust (Nasdaq: NTRS), NetSpend (Nasdaq: NTSP), Ocwen Financial (NYSE: OCN), Oppenheimer (NYSE: OPY), optionsXpress (Nasdaq: OXPS), PICO (Nasdaq: PICO), Piper Jaffray (NYSE: PJC), PMI Group (NYSE: PMI), Penson Worldwide (Nasdaq: PNSN), Portfolio Recovery (Nasdaq: PRAA), Raymond James (NYSE: RJF), SEI Investments (Nasdaq: SEIC), Stifel Financial (NYSE: SF), Safeguard Scientifics (NYSE: SFE), State Street (NYSE: STT), SWS (NYSE: SWS), T. Rowe Price (Nasdaq: TROW), Visa (NYSE: V) and Virtus Investment Partners (Nasdaq: VRTS).