February 17, 2023

Markets:

U.S. stock futures slipped on Friday as stubbornly high inflation and a rebound in rates continue to weigh on investor sentiment.

The major averages all shed more than 1% on Thursday, after the Labor Department said the producer price index — an inflation metric that tracks wholesale prices — rose 0.7% las month. That was more than economists expected.

Stocks were also under pressure following comments from St. Louis Federal Reserve President James Bullard. He said he backed a 50 basis point interest rate hike at the central bank’s previous meeting and that he would not rule out a rate increase of that magnitude at the March meeting.

Fed commentary aside, consumers have been a key focal point for investors this week, particularly in light of the latest round of inflation and retail sales data.

Investors will watch Fed officials for more hints on the central bank’s rate-hiking campaign. Richmond Fed President Tom Barkin will be speaking about the labor market on Friday . Fed Governor Michelle Bowman is also taking part in a discussion at the Tennessee Bankers Association’s credit conference.

Yields on the 10-year and 2-year U.S. Treasury bonds ticked higher Friday as investors sold the assets, worried about rising inflation and the potential for larger rate hikes from the Federal Reserve.

Portfolio:

We enter the new trading session holding set-ups in PLTR, CFLT, and VKTX. Yesterday the rug was pulled into the close but we truly believe it has more to do with the 1.8 trillion options expiring today and the wild swings that normally take place on options expiration Friday – just started a bit earlier. Do not overreact and chase any moves here. Allow price to materialize. I would not be surprised at all to see a positive close but the real tell will be Tuesday, the start of a new trading week. If it wasn't for the long holiday weekend, I would be more bullish on a price turn into todays close. The close on Monday being me a bit of hesitation. Regardless, outstanding start to the year continues and should anything fire up in the queue we will look to take advantage of it today. Beyond excited for next week and everything that the current trend will bring. I cannot stress enough the opportunity in front of us all over the next several months. Let's take full advantage of it!