Welcome to MarketBites! Here's all you need to know about yesterday's market news.

“Action is the foundational key to all success."

 - Pablo Picasso

PORTFOLIO MANAGER COMMENTARY

Indices started off in the red to begin November ahead of an expected 75 basis-point rate hike today. Stocks had started out the day trading higher due to hopefulness of looser Covid restrictions in China. Then, stocks came back down after new data showed a red-hot labor market which made investors worry that the Fed would cement their hawkish stance for a longer time frame. Markets have already priced in an interest rate raise of 75 basis points for today, but any signs of a more hawkish Fed in the future could cause a violent reaction. 

“The November meeting isn’t really about November. It’s about December,” says Michael Gapen, chief U.S. economist at Bank of America. He expects the Fed to raise rates to a level of 4.75% to 5% by spring, and that would be its terminal rate — or endpoint. The 75 basis point hike Wednesday would take the fed funds rate range to 3.75% to 4%, from a range of zero to 0.25% in March.

.By Kevin Hurley

Investment Analyst

CHART OF THE DAY

The chart below highlights monthly returns from a basket of meme stocks tracked by Bloomberg. These meme stocks just ended their best month of the year in October and outperformed the broader market. It is the most recent sign that the 'pivot' rally may have gone too far and been too quick. This is similar to the frenzy in retail-favorite shares this past summer that was quickly squashed after Powell's hawkish sentiment at the Jackson Hole economic symposium in late August.

WHAT ELSE IS HAPPENING

• Homeowners say the new year could be ugly as investors pull back - read here
• Ukraine war updates - read here
• Supreme Court hears arguments on affirmative action - read here
• Musk ousts Twitter board, as planned, and becomes sole director  - read here