Wow! What a roller coaster we've seen on the NSE since we bottomed out in November 2023 with the NSE20 printing 1416.On September 4th 2026, The NSE20 topped out at 4,504, a whopping 318%, and a level last seen in August 2015.
But today, after 2 years of rate cuts that saw the FED rate come down from a 23 year high of 5.25% in 2024, to 3.25% in 2026, the FED has hiked by 25 basis points today and signaled a further rate hike this year with more expected in 2027. This will have a ripple effect across the world and we have already seen the blue chips at the NSE like Equity Bank and KCB shed a bit of weight after crossing the 100 mark for the first time post bonus and split. Add to that the elections in the coming year and the situation gets interesting. Would recommend taking profits particularly from the bank stocks that have really rallied and get a bit defensive by going for stocks with the highest dividend yields(currently quite low with the recent rally), and allocating a bigger chunk to Fixed Income for 6 months then get back to great stocks like Equity Bank a week before dividend book closure date(they tend to fall a few days to book closure so the big boys can get a good dividend yield)
We should have also one good santa rally as we come to the end of the year and 1st week of next year so we should also be on the look out for this.
Currently the US indices are bleeding following the rate hike( which was expected, given the high inflation brought about by the US/Iran war and the resulting high crude prices) but what many investors didn't expect is further rate hikes next year. That caught them off guard.
If you are into crypto, well that's where the action will be until FED goes easy on tightening.
Bitcoin bottomed in November 2022.
The Fed hiked rates three weeks later, then hiked another three times over the following five months.
BTC protected the bottom through every hike and still rallied almost 100% over that period.
A similar sequence played out in 2018. Bitcoin bottomed days before another rate hike, then continued recovering into the end of year.
Zec is the new Bitcoin in this cycle. Rallied today like crazy despite the FED rate hike. Interesting times ahead!