Answer Included at Bottom of Post.
So, we all know that stocks drop right before inflation data is announced. However, is there any sort of logical way to determine which ones are going to drop that week? For instance, does oil always drop beforehand, or does the tech sector usually crash temporarily, etc? And is there a group of stocks that aren't influenced much by the upcoming announcement (or even go up right beforehand)?
I want to buy the dip before the Fed's announcement occurs tomorrow but can't tell which stocks are dropping due to anxiety surrounding the announcement and which are dropping because of other situations behind the scenes.
Edited to add: Someone answered my question, just not in the comment section.
We are in the “Late Stage” of the economic cycle, which is the stage that usually comes before “Recession”. During this “late” stage, Energy, Utilities, Consumer Staples, and surprisingly Real Estate historically do the best. Then, during the recession phase, Consumer Staples, Health Care, and Utilities tend to perform the best.
If investors think an announcement will say that we are clearly closer to the “Recession” phase than we were before, they will most likely pull from the sectors that aren’t Consumer Staples, Health Care, or Utilities. That being said, many stock holders react emotionally and will pull from all over the board if they think stocks will go down for any reason. So, technically you can never know since people act irrationally. However, having this information may answer your question and help you to know what to stay invested in long term.
