July 13, 2022

Markets:

Stock futures slid on Wednesday after June inflation data came in hotter-than-expected, contributing to growing fears that the Federal Reserve will get more aggressive in its fight to tame rising prices.

The consumer price index rose 9.1% on a year-over-year basis in June, coming in even higher than May’s 8.6% reading, which was the biggest increase since 1981. Economists surveyed by Dow Jones’ had anticipated an 8.8% print.

Core CPI, which excludes food and energy prices, came in at 5.9% and above the 5.7% estimate.

The hot reading could prompt the central bank to hike another 75 basis points during this month’s meeting or raise expectations of an even larger increase to tame surging prices. Last month, the Fed raised its benchmark interest rates three-quarters of a percentage point to a range of 1.5%-1.75% in its most aggressive hike since 1994.

Investors on Wednesday continued to monitor second-quarter earnings for clues into the health of U.S. companies. Delta Air Lines shares slipped 3.5% in premarket trading after posting mixed results. Major banks including JPMorgan and Morgan Stanley are slated to post results Thursday.

Portfolio:

We enter today's new trading session holding positions in WEBR, LCID, ALLY, and holding itrm. We will be evaluating price action very closely at the open and want it to stabilize for the first hour or so before we proceed. This could be a peak point for inflation. We also have major U.S. banks kicking off earnings season for us tomorrow. Options market expect earnings-day moves to average +/- over 6% this quarter, the third highest in the past 12 years. This is outstanding fuel and we cannot wait for this period ahead. Be ready today and let's have a great session. Do not chase moves here, be patient.