May 19, 2022

Markets:

Stock futures were under pressure again on Thursday with the S&P 500 on the brink of a bear market. Investors continued to dump equities on fears Federal Reserve rate hikes to fight rapid inflation would tip the economy into a recession.

Futures on the Dow Jones Industrial average fell 242 points, or 0.8% a day after it experienced the biggest one-day drop since 2020. Nasdaq 100 futures slipped 0.9%.

On Wednesday, the Dow fell more than 1,100 points, marking its worst sell-off in nearly two years. The S&P 500 also suffered its worst one-day decline since June 2020, losing about 4%, and the Nasdaq Composite fell 4.7%.

Overseas markets followed Wall Street’s lead overnight, with stocks in Japan, South Korea and across Europe all falling.

Stocks have been under pressure all year, as concerns over rising inflation and higher interest rates have sparked sell-offs in risk assets like equities.

Several Wall Street strategists issued some dire forecasts for stocks if the Fed’s rate increases tip the economy into a recession. GDP in the first quarter decreased at a 1.4% rate and strategists fear a deeper downturn is ahead. Deutsche Bank cut its official target for the S&P 500 overnight but said a recession would bring even bigger losses.

Portfolio:

We enter the new session holding positions in AVYA, AR, and holding itrm. Further opportunity is now being created, especially to the downside with trend lines being breached. If bulls cannot gather and build back today; could get super ugly for a few sectors with complete breakdowns. This would present massive opportunity short term for us. Watching this closely. Be ready today for updates and a potential new trade alert. Let's have a great session.