High Covid cases and the Feds Tapering means nothing to the stock market as the Dow jumps 380 points today

The Pandemic continues to rage through the country, hospitals are overwhelmed and businesses are planning to shut doors due to the new rise in covid cases, but the stock market is doing fine so far. The down jumped 380 points today, and the Nasdaq added a 2% upside rally after the FEDs released the interest rate tapering timeline.

The Feds said on Wednesday, December 15^th, 2021, that it would slow down its asset purchases, a process called tapering, that has been helping to ease the effect of the Coronavirus pandemic on the economy. This is supposed to be bad news for investors but since the timeline is not so near, the stock market traded up today.  Also, the Feds will not stop the bonds buying completely, it would only reduce the monthly purchase to $60 billion from $90 billion. 

The move was put in place as the government is trying to tackle the interest rate that has been out of control since the pandemic started.  The government has been pumping money into the economy to help it from crashing and as a result, the interest rate has been affected.

To fix the interest hate issue, this means the Feds must stop printing cash and this will also affect the economy negatively due to the labor issues and other things.

It’s going to be a lose-lose situation for investors if the feds taper its spending and the pandemic is still affecting the economy.

“Now I have seen how high rates are going and how fast it’s going to happen. The uncertainty is removed from the market. From an equity perspective, now they just have to focus on earnings, margins, and growth,” said Jim Caron, a chief strategist on the global fixed income team at Morgan Stanley Investment Management.

The cash printing to push funds into the United State’s economy was put in place to help the stock market to stay afloat, pulling the plug can be devastating but it's needed. More importantly, investors should pay attention to this. 

• The S&P 500 rose 1.63% to 4,709.85
• Nasdaq Composite jumped 2.15% to 15,565.58.
• The Dow Jones Industrial Average added 383.25 points, or 1.08%, to close at 35,927.43.