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As the clock ticks toward the Fed decision next Wednesday, the stocks are not taking it well. Of course, Amazon’s poor earnings after the close last night was a key catalyst today. Amazon shares are closing down over 14% on the day, and is also closing below its 200 week MA for the first time since 2009.
Apple’s earnings released yesterday were quite not as bad, but they warned about a revenue hit expected from China which acted as a reminder of the impact of the Covid lockdown for not only Apple, but others that rely on supply from that country.
Will supply constraints/supply shock ever go away and what will be the impact on inflation going forward?
Meanwhile the Fed will raise rates by 50 basis points on Wednesday, and have more or less telegraphed another 50 basis points and other tightenings into the year end as they try to break some of the inflation run higher and get their target rate toward the neutral rate of 2% to 2.5%.
In further anticipation, rates moved higher today which acted as another head wind to the stock market. The 30 year yield is back above the 3.00% level after dipping to 2.82% at the low for the week. The 2 year yield is also back near the high for the cycle at 2.787%. The 10 year yield is 5 basis points from its cycle high at 2.981%
For the month of April,
For the stock market today, the major indices took it on the chin again after a reprieve yesterday:
For the week, the NASDAQ index was the worst performer losing close to 4% on the week as well. The numbers for the week are showing:
Stocks continue to prepare for higher rates, higher inflation, and potentially slower growth ahead as well.
In the forex today, the USD is ending mixed on the day with gains vs the NZD, AUD, CAD, and declines vs the GBP, JPY and EUR. The USD was near unchanged vs the CHF today.
The GBP was the strongest of the major today, while flow of funds exited the risk-off currencies. The NZD, AUD and CAD were the weakest of the majors.
Technically: