January 27, 2022

Markets:

Futures tied to Wall Street’s major indexes fluctuated in pre-market trading Thursday after a turbulent previous session that saw stocks reverse gains into the close after the Federal Reserve signaled interest rate hikes could come as soon as March.

The central bank held rates at near zero following a two-day policy meeting that concluded on Wednesday, citing plans to halt pandemic-era policy of asset purchases first. The Federal Open Market Committee, however, reaffirmed it will wrap up the process in early March, suggesting the first rate hike could come in six weeks.

Investors had been anticipating clarity from the Fed on measures it would take to mitigate inflation leading up to Wednesday's statement, with uncertainty around the pace and extent of policy change weighing on markets since the start of the new year.

Powell deflected questions about whether a 50 basis point hike was on the table, including one posed by Yahoo Finance’s Brian Cheung about whether hikes would be gradual, but Powell indicated that the central bank’s moves could differ in tempo from when it began raising rates in 2015 due to the notably stronger economy and labor market and inflation running hot.

The Bureau of Economic Analysis is also set to release its first estimate of fourth-quarter GDP, with U.S. gross domestic product (GDP) likely higher in the final months of 2021 along still-solid consumer spending.

Portfolio:

We enter the new trading session holding positions in DDD, BITO, and continue to hold itrm.  Absolutely incredible market swings yesterday as the markets digested the Fed, earnings, and expectations moving forward.  We feel we are well positioned for the markets over the next two weeks.  Our only concern is one more major rug pull before a strong market in February.  Based on indicators, we can see a strong month ahead.  So many names are extremely oversold.  I know not many are in this camp, but based on readings it just looks primed for a major move higher potentially.  We need to remain nimble and await the trend to develop.  Be ready today and let's have a great session.