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THIS WEEK'S UPDATE

| April 11, 2022
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THE WEEK ON WALL STREET

Stock prices fell last week in response to the Fed’s plan to combat inflation, which

staked out a more aggressive stance than investors had anticipated.  The Dow Jones

Industrial Average slipped 0.28%, while the Standard & Poor’s 500 fell 1.27%. The

Nasdaq Composite index dropped 3.86% for the week. The MSCI EAFE index,

which tracks developed overseas stock markets, slid 2.05%.


FED ROILS MARKETS 

After a positive start to the week, stock prices turned lower on a more hawkish tone

from Fed officials. On Tuesday, investors were surprised by comments from Fed

governor Lael Brainard, one of the Fed’s more dovish members, who suggested the

Fed could take a more aggressive approach with interest rates. The unease extended

into Wednesday when minutes of the last Federal Open Market Committee (FOMC)

meeting were released, signaling a potentially faster pace in both interest rate hikes

and the wind-down of the Fed’s balance sheet. Yields climbed steadily throughout

the week as the bond market digested this new information. Particularly hard hit

were high valuation stocks, as reflected in the 4% drop in the Nasdaq.


FED MINUTES           

After raising the federal funds rate by 0.25% last month, the minutes from the

March FOMC meeting made it clear the Fed is serious about fighting inflation with

higher interest rates.  Fed officials indicated they might have hiked rates by a half

percentage point in March had it not been for the uncertainty created by the

invasion of Ukraine. Multiple Fed officials suggested that future rate hikes may

reach 0.5%. Fed officials also discussed allowing up to a $95 billion monthly run off

the Fed’s balance sheet, a faster pace than the market expected.


THE WEEK AHEAD: KEY ECONOMIC DATA

Tuesday: Consumer Price Index (CPI). 

Wednesday: Producer Price Index (PPI). 

Thursday: Jobless Claims. Retail Sales. Consumer Sentiment.

Friday: Industrial Production.


THE WEEK AHEAD: NOTABLE COMPANIES REPORTING EARNINGS

Tuesday: CarMax, Inc. (KMX), Albertsons Companies, Inc. (ACI).

Wednesday: JPMorgan Chase & Co. (JPM), Delta Air Lines, Inc. (DAL), BlackRock,

Inc. (BLK).

Thursday: UnitedHealth Group (UNH), The Goldman Sachs Group, Inc. (GS), Wells

Fargo & Co. (WFC), Morgan Stanley (MS), The PNC Financial Services Group, Inc.

(PNC).


FINAL THOUGHTS

This is a holiday shortened week with few companies reporting earnings.  The

market will trade on news and sentiment.  Earnings season will begin to pick up next

week and we will start to get more facts.  Until then, the market continues to worry

about inflation, rising interest rates and Russia.  Negative sentiment prevails for the

moment.  Our quarterly update is in the works and should go out later this week via

snail mail and next Monday via email.  Have a good week and may Easter blessings

find you.


 

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