October 11, 2022

Markets:

U.S. equity futures slumped in the early trade Tuesday, while Treasury yields pushed higher as a rout in the stock and bond markets persisted.

Investors are navigating a murky week marked by producer and consumer inflation data and the first reporters of third-quarter earnings season, which include four of the country’s largest banks by assets.

Markets remain on edge over the government’s Consumer Price Index (CPI), which is likely to show inflation remained persistently high despite aggressive intervention by the Federal Reserve to slow the economy. Following the release of August’s CPI print, the S&P 500 plunged more than 4% in its worst day of the year so far.

In a rare admission, Federal Reserve Vice Chair Lael Brainard said policymakers must be prudent in lifting rates higher amid global macroeconomic uncertainty as previous hikes still work their way through the economy.

On Monday, JPMorgan Chief Executive Jamie Dimon in an interview with CNBC said stocks may fall an "easy 20%" from current levels, depending on the economic outcome of the Fed’s actions, and warned also that the U.S. economy may enter a recession by mid-2023.

Portfolio:

We enter the new trading session looking weak but expect the market to whip saw a bit as we head into CPI numbers on Thursday. We enter the session holding positions in WEAT, MPW, NBIX, and PARA. We want to remain patient here and only pinpoint A+ set-ups heading into CPI. The real excitement, and should be for all, will be with earnings. Monster potential and opportunity especially as we head into mid-terms. Be ready today and let's have a great session. Stay patient.