May 4, 2022

Markets:

Stock futures moved higher in early morning Wednesday as investors braced for the Federal Reserve’s big interest rate decision, where the central bank is widely expected to hike rates by half a percentage point.

Markets are preparing for a hawkish Fed, and the central bank is also expected to announce a plan to cut its roughly $9 trillion balance sheet by $95 billion a month, beginning in June.

This year, stocks have fallen sharply and Treasury yields have spiked, but it is not clear if the market has fully accounted for an aggressive Fed.

The S&P 500 is currently trading in correction territory, down about 12.4% year to date.

A brief calm in the midst of a rising interest rate storm boosted weekly mortgage demand ever so slightly last week, but it is unlikely to be the start of a new trend. Rates have already moved sharply higher this week.

Total mortgage application volume rose 2.5% for the week ended April 29 compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. That was because mortgage rates took a very slight step back, and the spring housing market entered its historically busiest time.

Portfolio:

We enter the new trading session holding positions in PLTR, ON< AR, and holding ITRM. We will be looking to add today so please be ready. Most likely our time frame would be after the fed release but be on alert in case we see a quick trade opportunity materialize. Cannot wait to get todays Fed event past us. The market wants to open up and we are hoping todays even provides the lift it needs. Opportunities could explode.

Yesterday we once again were treated to wild swings. We will continue to remind everyone; be patient. Do not chase these day to day swings or moves. Be ready today and let's have a great Fed day!