December 13, 2021

Markets:

Stock futures edged higher Monday morning, with the S&P 500 looking to steady near record levels as traders awaited a Federal Reserve monetary policy decision later this week. 

Shares of heavily weighted U.S. equity index component Apple (AAPL) added another more than 1% in early trading and looked set to open at a fresh all-time high. On Friday, Apple shares closed within 2% of bringing the stock's market capitalization to $3 trillion. 

Investors' focus this week will be on the Federal Reserve's December policy-setting meeting, which will take place between Tuesday and Wednesday. A new monetary policy statement and press conference with Fed Chair Jerome Powell are due mid-week, alongside the Fed's updated Summary of Economic Projections charting out individual members' outlooks for economic conditions and interest rates. Policymakers for other central banks are also set to meet this week, including those from the Bank of England and European Central Bank. 

The Fed's decision has taken on additional significance as the market attempts to predict how policymakers will weigh persistently elevated inflation against the specter of a fresh wave of the coronavirus with the newly discovered Omicron variant. U.S. inflation rose at its fastest pace since 1982 in November, last week's Consumer Price Index (CPI) showed, pointing to the ongoing mismatch between supply and demand in the recovering economy. 

On the virus front, the Omicron variant has so far been detected in 30 states, according to data compiled by the New York Times. Early data so far have suggested the variant is more transmissible than the earlier Delta variant, but may cause less severe disease and be able to be neutralized by a booster dose of the COVID-19 vaccine, according to Pfizer. On Monday, the World Health Organization said the Omicron variant remains a "very high" global risk, while underscoring that data on the severity of the disease is still limited. 

Portfolio:

We enter the new trading week holding positions in NU, IONQ, PLTR, OPEN, and continue to hold itrm.  The back-and-forth trade activity continues since Thanksgiving week as traders / investors continue to try and grasp the Fed, Omicron, and Inflation numbers.  It's easy to think all will be sold off to end the year but the “pain trade" at this point would be a rally.  We are watching this closely and our trend lines. With the Fed's policy meeting occurring this week, we expect choppy sessions until the fed meeting ends on 12/15.  After this event; then the real trading range will be revealed.  Nothing is in the market’s way until the New Year.  We will be looking for quick trade opportunities.  Be ready, let's have an outstanding week and trading session.