December 14, 2022

Markets:

Stock futures were little changed Wednesday as investors awaited the Federal Reserve’s latest interest rate hike decision in its effort to crush inflation.

The Fed will conclude its December meeting and is expected to deliver a 50 basis-point rate hike. That’s a smaller bump after four consecutive 75 basis point hikes. A basis point is equal to one hundredth of one percent.

Chair Jerome Powell will also speak Wednesday, giving further clues about what’s coming from the Fed in 2023. In previous meetings this year, traders have been sensitive to Powell’s language, interpreting his tone as hawkish or dovish.

Stocks rose for a second day Tuesday, fueled by a cooler-than-anticipated inflation report. The November consumer price index was 7.1% on the year, less than the 7.3% gain expected by economists surveyed by Dow Jones. The 0.1% increase from the previous month was also less than forecast.

The signal that inflation may have peaked was positive for stocks as it means the Fed may be one step closer to halting interest rate hikes or switching to cuts, which would fuel equities.

Portfolio:

We enter Fed Day holding set-ups in ASAN and ENVX. Really, nothing matters until the Fed release. Expect the market to be rather muted and at a standstill until we receive the Fed release and the Fed Chairman speaks. What we've noticed over the past year; first reaction tends to be faded and then AFTER the Fed speaks can you begin to truly see where traders / investors are moving too and which way the trend might fall. Stay patient! As difficult as it might be at times, just wait and see and allow it to materialize. We are seeing for a ton of "fade this recent move higher" narrative. Remember, the difficult trade is typically the right trade. We do not have to worry about the Fed for over a month now and have yearend trade beginning after today. This will be a strong period of trends and we love this time of year. Be ready and stay patient today!