Futures are up modestly this morning after the markets spent a day in the spin cycle on high. Overnight saw a bit of a comeback from the euro markets but this modest rally is falling far short of making up ground following Wednesday’s drubbing.
Breaking 4K on the close again was a painful one for the bulls. Now we look ready to test 3900 again on the SPX 500, but clearly the markets are rangebound, let’s call it 3800-4200, with potential to 3600 on the downside.
The Federal reserve raised interest rates one more time, bringing the funds rate to 4.75%, the highest level in several years. Chair Powell indicated there would be more hikes, and indeed the committee’s dot plot said at least one, but he also threw cold water on those looking for rate cuts later in the year.
Some earnings out this morning, ACN beat but lowered guidance, GIS and DRI both beat and guide earnings higher for 2023.
The Fed decision was clearly the big event, and markets did not like the move.
Breadth was poor coming into the Fed decision but got much worse the last 90 minutes of trading. Two strong breadth days were washed away, the price oscillator is now in negative territory.
Volume was pretty heavy from the start and finished very strong, another distribution day for a market in correction.
We thought moving up/out above 4K was going to be a big deal, in fact markets were up strong and pushing 4050 during the day but the sellers took control and drove the markets lower. Support at 3900, resistance at 3950 and better support at 3802.
What’s it mean?
Solid reversals here on swelling volume. That is a bearish sign, the market remains in a correction. Note the big rise in TRIN, that happened due to the whipsaw moves and surprising move at the end of the day. VOLD was straight down, it never broke out during the day, hence no trend until the last hour. ADSPD showed a trend down day while ticks negative were concentrated. All in all, a very bad day for the bulls.
- Thursday:Jobless Claims, new home sales
- Friday:Durable Goods, Global Flash PMI
Earnings this week:
- Thursday: ACN, GIS, DRI
- Friday: XPRS
Fed Watch: The Fed raised rates one more time, delivering another blow toward inflation. We’ll see if that continues on, but markets sure did not like the move. Bank of England raised rates this morning by .25%.
Stocks/issues to Watch
Gold – the metal is strong and approaching 2k an ounce.
Yields – Rates are creeping up, the 10 year is making a move towards 3.5%.