You may want to go back to bed.
Futures are ugly. The Dow is currently down 372 points. The NASDAQ is down 191, as the S&P 500 slips about 53 points. Worse, on this last day of the second quarter, the S&P 500 is about to close out its worst first-half decline since 1970. All thanks to the Federal Reserve, conflict around the world, inflation, and fears of recession.
And, as noted by Wells Fargo CEO Charles Scharf, the economy isn’t ready for more rate hikes.
“We know rates are going up; it couldn’t be clearer,” he told CNBC. “We know that consumers and businesses, while strong today, are going to see deterioration, and we’re going to act surprised when it happens.”
Technically, the Dow Jones could test lower lows if we break below prior support around 29,653. Should that happen, we have to consider there’s no real support until the Dow drops below 27,000 – testing an early 2020 low.
To protect portfolios from the potential downside, investors may want to consider the ProShares Ultra VIX Short-Term Futures ETF (UVXY), which rises along with volatility.