June 16, 2022

Markets:

U.S. stock index futures were under pressure Thursday, putting the major averages to give up the solid gains made in the previous session.

The 10-year Treasury yield resumed its massive June run on Thursday, reversing higher overnight. The 10-year yield was last around 3.44% after ending May at 2.84%.

Those moves come after the Federal Reserve implemented its largest interest rate hike since 1994 on Wednesday. The Fed raised rates by 75 basis points, as was widely anticipated.

Stocks took a leg higher Wednesday after Powell said that a 50 or 75 basis point increase “seems most likely” at the next meeting in July, indicating the central bank’s commitment to fighting inflation. Powell did caution, however, that decisions will be made “meeting by meeting.”

The Swiss National Bank overnight raised rates for the first time in 15 years. The Bank of England was set on Thursday to raise rates for the fifth straight time.

Rampant inflation, which is at the highest level in 40 years, has weighed on the major averages, as have fears around slowing economic growth and the possibility of a recession.

Portfolio:

We enter the new trading session holding three positions; 2 shorts in ALLY and MTW as well as our lotto play in itrm that we are holding for now.  We remained super patient yesterday and watched price activity closely, especially after the fed release. We had our head fake and now here we are this morning looking at a weak tape. One thing to keep in mind is Quarter ending trades. We fully expect some buying / rebalancing to start a week from now as we head into end of quarter. Just keep that in mind as you build your trade plan. Monster opportunities are developing, and we love what we are seeing right now. Be on alert today and stay patient. Expect some new set-ups to be released.