The Federal Reserve hiked interest rates for the first time in three years. Retail traders responded by panic-selling their fractional shares of Starbucks and asking Reddit if GE Vernova is the same as regular GE.
It's not. GE Vernova is the power and energy spinoff that exists because GE spent decades buying every company it could find and then realized conglomerates are stupid. The stock trades under its own ticker now. This will not stop someone named Kyle from buying the wrong one.
Starbucks moved on news that people still buy seven-dollar coffee during a rate hike cycle. The company sells sugar milk to adults who never learned to sleep properly. The Fed raised borrowing costs and Starbucks raised prices and somehow both institutions believe they are helping.
GE Vernova moved because energy stocks move when anything happens. A rate hike. A rate cut. A dove sneezes in Jackson Hole. The algos don't care. They see the word "power" in the company description and start buying.
The Investing Club released its Homestretch update just in time for the last hour of trading. This is when retail makes its worst decisions. The margin calls start rolling in. The stop losses trigger. Some guy in Ohio watches his portfolio drop eight percent and decides now is the time to buy leveraged ETFs.
The Fed's first hike in three years means rates have been at zero for three years. Three years of free money and retail spent it on meme stocks and JPEGs of monkeys. Now the punch bowl is gone and everyone is surprised that borrowing costs matter.
Charts don't care about rate hikes. Support levels don't read FOMC statements. A trend is a trend until it isn't. The Fed can hike rates to the moon and it won't change the fact that Starbucks gaps up on volume every time someone tweets about pumpkin spice.
Retail will check the Homestretch update, ignore every word, and buy weekly calls anyway.
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