What Is Happening In The Market?
Before I start, I just want to put this picture here. So that I can remember this day as one of my heaviest holding went up 60% in a day! Digital Turbine Share Price Gain on 11/11/2022 Nevertheless, this also highlights the current situation in the market. The market is very volatile due to the macro environment. On a day that CPI increase lower than expected, along with a better than expected result, allow Digital Turbine to increase over 50% today. But a drop of 20% could also happen if companies did not performed better than expected and if the CPI data comes in worse than expected. This brings me to today's topic - What is really happening in my opinion? 1. Fed Repo Rate, which I deem as Risk Free Rate, is over 4%. Everyone expects Fed to continue to increase interest rate, which will continue to push up the Risk Free Rate. Companies, banks and institutions probably deem that the Risk Premium of holding onto equity might be too risky. Valuation of companies also tends to drop