This Week, All Eyes On The Fed

This Week, All Eyes On The Fed

Happy Halloween Everyone!

I might dress up as Inverse Cramer tonight because I know everyone will give me their money.

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Prices as of 4 pm EST, 10/28/22; % YTD


MARKET UPDATE

Month to date

  • S&P 500 +8.8%

  • Nasdaq +5%

  • Russell 2000 +11%

  • DOW +14.4%

October 2022 ranks as the 10th best month on record for the DOW since 1915

  • DOW holdings with October performance, all 30 DOW holdings up in October

    • Caterpillar +34%

    • Chevron +25%

    • Honeywell +22%

    • JP Morgan +21%    

    • Visa +18%

    • Apple +12%

    • UNH +9%

    • Walmart +9%

    • Home Depot +8%

    • Microsoft +1%

Why did the market go up in October?

  • Market believes the Fed will pause after 2 more hikes.

  • 75-point hike in November

  • 50-point hike in December

  • In September, Market assumed 75-point hike in December

  • In October, Market assumed only a 50-point hike in December

  • The revision from 75 to 50 which occurred in October was the catalyst for the majority of the October rally

  • Strong earnings from Caterpillar, Chevron, Visa, etc. also contributed

  • Investor Positioning

  • The strength also speaks to the elevated cash levels of investors and very low hedge fund leverage

  • Any small positive signal creates a large market impact

FOMC meeting is Wednesday

  • expect 75 basis point hike

  • Expect 2-year yields to go up

November 4, 2022 U.S. October jobs report

November 8, 2022 U.S. midterm elections

November 10, 2022 U.S. CPI

Europe: Inflation surged to 10.7% in October, GDP +0.2%

  • Russia pulling out of a UN deal to allow Ukraine grain exports, Wheat up 4%

  • Ukraine is one of the world’s biggest suppliers of wheat, corn and vegetable oil

  • The July agreement to open 3 ports has been vital to help alleviate a global food crisis

Crude 86.50 -1.5%

  • Crude lower after China’s Manufacturing PMI was 49.2 vs. street 49.8

  • New orders contracted for a 4th consecutive month

  • 8:30 a.m. OPEC 2022 World Oil Outlook

Shanghai Disney DIS

  • To close October 31 under requirement of pandemic prevention and control

Earnings

  • EMR Emerson

  • GPN Global Payments

  • L Loews

CRYPTO UPDATE

Doge

  • Dogecoin is up over 100% over the past week

  • Why? → Elon’s Twitter TWTR purchase

  • Market cap >$16 billion

    • That’s roughly 3 Lyfts LYFT

  • +$89 million in liquidations since Friday

  • ~$650 billion in futures open interest

  • Does it make sense? → Doesn’t have to ¯\_(ツ)_/¯

Investor flows to digital asset investment products

  • Minor ($6.1 million) inflows last week

  • 7th consecutive week muted flows

  • Bitcoin inflows $14 million

    • 70% of flow volumes

  • Ethereum outflows $2.1 million

    • 7th consecutive week of outflows

Posted In: contributorsmarket updateCryptocurrencyNewsSocial MediaMarketsGeneral