January 10, 2022

Markets:

Stock futures pointed to a mixed open Monday morning, with technology stocks under renewed pressure as investors anticipated higher interest rates this year and looked ahead to several economic data and earnings reports later this week.

Treasury yields were little changed to slightly higher, and the benchmark 10-year yield briefly topped 1.8% to reach its highest level since January 2020. 

The move higher in yields and volatility across U.S. equities came after the release of the Federal Reserve's December meeting minutes mid-last week. These suggested some central bank officials were eyeing a quicker start to interest rate hikes and balance sheet runoff process than many market participants had expected. Goldman Sachs economists now predict the Fed will raise interest rates four times this year — or one time more than the firm previously expected — and that the central bank's balance sheet reduction will begin in July or earlier. 

In addition to Powell's confirmation hearing before the Senate Banking Committee on Tuesday, investors will also be looking ahead to a new inflation report on Wednesday. The Bureau of Labor Statistics will release the December Consumer Price Index (CPI) that day, which is expected to show an about 7.0% year-over-year jump in prices — or the biggest rise since 1982. And at the end of the week, big banks including JPMorgan Chase (JPM), Citigroup (C) and Wells Fargo (WFC) are each slated to report Friday morning before the opening bell.

Portfolio:

We enter the new trading week holding positions in ZION, ASB, and continue to hold itrm.  Beyond excited for the week ahead with earnings set to begin.  We cannot stress enough how this should be welcomed by all.  

We expect a very busy week ahead.  Please be ready and let's start to capitalize.  Let's have a great session and week!