Fed Week-Groundhog Day
Last week was a replay of the prior week as equity markets sold off Thursday and Friday and global markets reopened post Fed meeting. Believe it or not it was almost a flat to up week, but the last hour of Friday’s trading pushed us net lower for the week. Apparently, some leveraged investors were disappointed by the Fed not leaving 75 basis points on the table. Continued China lockdowns, and late in the week piece of wage inflation, which point to slowing and stalling summer growth, weighed on expectations for the 2nd half of the year.
This week is starting off with old trends, down Monday’s (I call them “margin call Monday’s”), with both bonds and equities under pressure on concern about Fed tightening and China’s COVID lockdowns. U.S. equity futures are down around 1.5% following a week that left the S&P 500 barely down, but still down -13.5% from the start of the year.
Tech stocks dropped as yields rose last week sending the Nasdaq down -1.5% and -22.4% year-to-date. The 10-year Treasury note yield is up another 4 bps to 3.197% after rising 20 bps last week and more than doubling since the start of the year. The yield curve is no longer inverted. The 30-year fixed mortgage rate of 5.5% is the highest since 2009, signaling further cooling in the housing market. Oil prices have stalled near $105-110 sending U.S. regular gasoline prices to new highs of $4.46 per gallon. Natural gas prices remain above $8 per MMBtu.
There is one major U.S. economic release this week. The CPI is expected to slow down in April due to lower gasoline and used vehicle prices, with the yearly rate dropping to 8.2% from a four-decade high of 8.5%
Weekly Stock Podcast: “Value stock or Value Trap?”
https://www.youtube.com/watch?v=qcCDP02Nu4U
News or Noise: US GDP Drops -1.4%
https://www.youtube.com/watch?v=L_8OpVQQphs&list=PLxj0FBH5Bt8vxmPI12L9xWcpoVMX7jqvZ&index=20
Oak Harvest YouTube Channel
https://www.youtube.com/channel/UCkLvOm9F5iC01-hHxRmUXpQ
Stock Talk Podcast (Weekly Market News and Opinion from Oak Harvest):
https://oakharvestfg.com/stock-talk-podcast/
The Investor Mindset Podcast (Introduction to Critical Concepts for Investors):
https://oakharvestfg.com/investor-mindset/
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