Friends
The bears have made their presence known so far this week. After a good start to the year for the bulls, reality that the economy is slowing, and the Fed doesn’t seem to care has begun to set in. Today’s PPI and Retail Sales numbers showed again that inflation is slowing at the wholesale level and the consumer is beginning to reign in their spending. While the “slowing economy narrative’ permeates the markets, Fed officials continue to insist that they are going to stick to their guns and raise the Fed Funds rate further in the coming months. Stocks are not fond of that combination at the moment.
For the day, the Dow Jones Industrial Average was down 613 points to close at 33,296. The S&P 500 was down 62 points to finish the day at 3,928. The Nasdaq Composite Index was down 138 points to close at 10,957. Gold was down $5 to trade at $1,904 per ounce, while oil was down $1.04 to trade at $79.14 per barrel WTI.
So, after a nice couple of weeks for the bulls, stocks have once again come under pressure. The setup is still difficult for the bulls. Sure, a good earnings season would help, but as long the Fed continues to move rates higher into the teeth of an economy that appears to be slowing stocks will struggle (have we mentioned don’t fight the Fed?). The employment situation continues to give the Fed cover and understandably so. As long as folks have a job, they will spend, maybe not at the pace they were after the pandemic, but they will spend, nonetheless. So, as we have said before, we still have some wood to chop. Stay tuned.
Have a nice evening everyone.
