September 19, 2022

Markets:

Stock futures pointed to more losses Monday — following the major averages’ worst week since June — as interest rates surged ahead of the Federal Reserve’s two-day meeting this week.

The 10-year Treasury yield topped 3.5% on Monday, its highest level in 11 years, and rates across the board continued to rise ahead of the Fed’s likely decision this week to raise its benchmark rate by another three-quarters of a point to snuff out inflation. After some brief hope over the summer that the Fed may be done its aggressive tightening campaign soon, investors have begun dumping stocks again on fears the central bank will go too far and tip the economy into a recession.

Investors are coming into the new week focused on the Fed’s latest policy meeting, which will begin Tuesday. The central bank is expected to raise interest rates by another three-quarters of a point, though investors are also watching for guidance about corporate earnings before the next reporting season begins in October.

Beyond the Fed meeting, there are just a few economic data releases this week, including August housing starts on Tuesday and initial jobless claims on Thursday.

There are also a handful of corporate earnings on deck, including Costco, Darden Restaurants, General Mills and Lennar.

Portfolio:

We enter this highly antiicpated trading week holding positions in UXVY, AI, PINS, STEM, and COMM.  This Fed meeting and the expectations of the rate hike and how high they will go has essentially put a strangle hold on this market.  As many continue to turn you almost feel as if this market will burn each short after the Fed event. It'll be interesting to watch and and we cannot wait for this event to pass and the markets to once again trade with trends and technicals.  Algo's have such a strong grip right now and they want people chasing day to day moves.  Once this Fed event passes, we have our pathway to mid-terms and end of year cycle!  Stay patient here and be ready for further updates and a potential new trade alert.  Let's have a great week.