Fed Reaction and Global Economy

Last Week's Income Report: May 9th, 2022

ZIM Integrated Shipping Services (ZIM)

Fed Reaction and Global Economy

The Fed did what was expected and raised interest rates by 0.50% and said they’d continue to monitor the situation.  They kept the language neutral, which the market liked and had a one-day rally.  

Europe came out and said they are expecting slow downs in future growth as higher prices from inflation will be a barrier for the foreseeable future.  China continues to lock down cities as it’s fighting off new COVID infections.  As a result of a possibility of a European recession and supply chain issues from China, the market sold off the rest of week and continued its fifth week in a row of the SP500 falling.  That’s the first time that has happened in more than a decade.

We closed one winner in Options Income Blueprint last week, on ZIM Integrated Shipping Services (ZIM). This was our first time trading the Israeli international cargo shipping company.

We entered the position back on April 19, selling a May monthly put to generate a big slug of cash. On Tuesday, the stock spiked more than 8% and I recommend members book profits. This is not the kind of market where it pays to be greedy (if it ever does). And we walked away with a 1.8% return in 15 days, or 44% on an annualized basis.

I will be keeping an eye on this shipping play for another opportunity to sell a put and generate more cash.

In the latest Options Income Weekly, I discuss the market’s reaction to the Fed announcement and take a closer look at the ZIM trade.

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