August 24, 2022

Markets:

U.S. stock index futures hovered near two-week lows on Wednesday as uncertainty over the trajectory of Federal Reserve policy continued to hobble traders’ risk appetite.

Comments late on Tuesday from Minneapolis Fed President Neel Kashkari reinforced concerns that the central bank was not minded to pivot to a more dovish trajectory anytime soon, despite signs headline inflation may have peaked and amid a rash of downbeat economic data this week.

Fretting about the Fed was again smothering stock markets on Wednesday. Since hitting a near four-month high on August 16th, the S&P 500 index has swiftly retreated 4.1% as investors feared their optimism that the Fed would slow its pace of interest rate hikes was misplaced.

The shift in Fed policy expectations have pushed up benchmark borrowing costs and helped force the ICE Dollar Index DXY, 0.24% to fresh 20-year highs and both trends are often deemed damaging to U.S. equity valuations. Record high energy costs in Europe, which have raised fears of a recession in Germany, has also weighed on sentiment.

Fed chair Jay Powell is due to make a speech on Friday at the Jackson Hole symposium.

U.S. economic data on the slate for Wednesday include the July durable goods report, due 8:30 am Eastern, and the July pending home sales at 10 am Eastern.

And after the closing bell the market will receive earnings updates from a trio of once high-flying technology stocks: Nvidia NVDA, +0.86%, Salesforce CRM, -0.55% and Snowflake SNOW, +0.96%.

Oil futures were higher with U.S. crude CL.1, 1.17% adding 0.7% to $94.36 a barrel, ahead of the U.S. weekly energy inventory data due at 10:30 am Eastern.

Portfolio:

We enter the new trading session holding positions in CNHI and TELL.  Queue continues to ignite but we are trying to be cautious as we wait for the Fed. We are trying to pinpoint quick swing opportunities but the market continues to chop as we wait for the Fed this week.  Stay patient and just know after the Fed we have a path once again with trend lines in place.  Be ready and let's have a great day!