April 8, 2022

Markets:

U.S. stock futures were on Friday and the market headed for a losing week as investors braced for tighter monetary policy from the Federal Reserve.

Despite a mild rebound Thursday and Friday’s early gains, the major averages were headed for weekly declines. The S&P 500 and Nasdaq were down 1% and 2.6%, respectively, for the week through Thursday’s close. The Dow was down 0.7% week to date. Those losses would mark the first weekly losses for the S&P 500 and Nasdaq in four weeks. Meanwhile, the Dow is headed for back-to-back weekly declines.

The losses have been driven by a change of tone by the Federal Reserve, signaling it will be even more aggressive to fight inflation. On Wednesday, the central bank disclosed its March meeting minutes, revealing that policymakers plan to reduce their bond holdings by a consensus amount of about $95 billion a month. The minutes also indicated potential interest rate hikes of 50 basis points in future meetings. A basis point equals 0.01%.

The pivot by the Fed has caused rates to shoot higher. The 10-year Treasury yield hit a new three-year high high overnight Friday, rising above 2.69%. The rate ended last week at 2.38% and started the year at 1.63%.

Investors are also looking ahead to earnings season, which will kick off next week with reports from five big banks. JPMorgan will report before the bell on Wednesday. Citigroup, Goldman Sachs, Morgan Stanley and Wells Fargo will report before markets open on Thursday.

On the economic front, the wholesale inventories report will be released 10 a.m. Friday.

Portfolio:

We enter today's session holding positions in CLF, DLO, SCO, and ITRM.  Queue is still igniting with potential set-ups, just need further price activity confirmation.  Next week we begin earnings season.  This should be welcomed by all and hope to provide further insight into the economy and potential for eanings for the remainder of the year.  Continue to be patient here.  Allow the market to set up.  Yesterday many on the short side were sucked in to only have the market bounce exactly hwere it should have.  Watching technicals closely here.