October 19, 2023

Markets:

Federal Reserve Chair Jerome Powell is set to deliver what could be a key policy address, with markets bracing that the central bank leader may still talk tough on inflation.

The stakes got even higher Thursday morning as Treasury yields jumped. The 10-year note was on the cusp of hitting 5%, a psychologically important level that the benchmark security hasn’t seen since 2007, just before the worst of the financial crisis hit.

Rising yields could be a sign that markets think Powell will emphasize the higher-for-longer approach to rates backed recently by multiple other Fed officials.

Powell will speak at noon ET to the Economic Club of New York at a critical time for the U.S. economy.

Inflation numbers have been improving lately, but Treasury yields have been surging, sending conflicting messages about where monetary policy might be headed. El-Erian said the economy is on the verge of an “inflection point” and criticized the Fed for being dependent on data that is backward-looking at time when officials should be focused more on what’s ahead.

Netflix shares surged Thursday morning, after the company reported a boost in subscriber growth driven by a password-sharing crackdown efforts and interest in its new ad-supported tier.

Portfolio:

We enter the new trading session holding setups in RPD, NTNX, PATH, and AX. We continue to position ourselves for the next month and although the entries on a few have been hurt by recent swings, the overall story / trend remains. This market over the last several sessions has been a roller coaster, and they continue to hurt vol on both sides of the trade. The narrative today is Powell's speech. We will be watching closely for the reaction and where we see large lots of trades being executed afterwards. Right now, cannot stress this enough, but remain super patient and do not allow the day-to-day swings to move you from the overall picture and trend. Technically, this market continues to build and has yet to break technically. So much is coming to this market with news and earnings over the next few weeks along with seasonal trades beginning. This period will be outstanding, and this is only setting up the close of 2023 for a greater opportunity. Be ready and let's have a great session.