As traders and investors pondered the possible impacts on the economy of an aggressive Fed, the indexes struggled to pick a direction on Tuesday.  Ultimately, we had our second day of relief with a last-minute surge as the indexes eked out a small gain out the close.  Today, we have our busiest day of earnings events this quarter, with several economic reports likely to keep price action challenging as we head toward the FOMC rate decision and Powell’s press conference this afternoon.  So, buckle up for a wild day where anything is possible!

Asian markets closed mostly lower overnight, with Hong Kong leading the selling, down 1.10%.  Across the pond, European markets see red across the board as the EU proposes new oil sanctions with a Bank of England rate increase expected Thursday.  Finally, ahead of a massive amount of potentially market-moving data, the U.S. put on a brave face pointing to bullish open but expect challenging price action throughout the day.

Economic Calendar

Earnings Calendar

We have a busy day with nearly 350 companies expected to report on the Wednesday earnings calendar.  Notable reports include ADTN, ALB, ATI, ALL, ARMRN, ABC, ATO, GOLD, TECH, BKNG, BWA, EAT, CF, LNG, CIVI, CLH, CLVS, CXW, CTVA, CVS, DIN, EBAY, LOCO, EMR, ET, ETSY, FSLY, RACE, FSR, FTNT, FDP, GNRC, GIL, GBT, GDDY, GXO, HST, TWNK, IR, IRBT, JAZZ, JCI, LL, LITE, MRO, MAR, MET, MTG, MRNA, MUR< NBIX, NVO, NUS, OAS, PDCE, DOC, FXD, QRVO, QLYS, RYN, O, REGN, SBGI, SFM, STWD, STOR, RGR, SUN, RUN, TRIP, HEAR, TWLO, UBER, UTHR, VMC, WING & YUM.

News and Technicals’

Annual U.K. inflation hit a 30-year high of 7% in March as food and energy prices continued to soar.  As a result, the Bank imposed its third hike in a row at its March meeting, taking the bank rate to 0.75%, and the market expects a 25 basis point increase to 1% when the MPC meets on Thursday.  The tech billionaire, the CEO of Tesla and SpaceX, added that the social media platform will continue to be free for “casual users.” However, it’s unclear how much Musk would like to charge businesses and governments or whether certain groups such as non-profits and journalists would be exempt from any imposed fees.  Twitter is already experimenting with a paid-for subscription service called Twitter Blue in the U.S., Canada, Australia, and New Zealand that offers additional features.  AMD reported first-quarter earnings after the bell on Tuesday.  AMD’s results on Tuesday suggest that the chipmaker is still growing fiercely, with 71% sales growth in the first quarter.  Imposing measures that could reduce or entirely cut Russian energy supplies to the EU has been complicated for the bloc.  Two anonymous officials said that both nations will have until the end of 2023 to halt Russian oil imports.  The EU had moved last month to ban imports of Russian coal.  It is now about to implement restrictions on oil purchases.  And this is raising questions about whether the bloc will also stop its imports of natural gas.  Lyft reported first-quarter 2022 earnings on Tuesday.  Shares plunged on light guidance and continued driver incentives.  Treasury yields rise ahead of the FOMC decision, with the 5-year rising to 3.00%, the 10-year ticking higher to 2.95%, and the 30-year price at 2.99%.

On Tuesday, indexes struggled to pick a direction as prices whipped between gains and losses to eke out small gains with a last-minute surge up at the close.  However, the choppy price action was not a surprise as investors pondered the possible outcomes of the FOMC decision.  At 2 PM eastern today, we will finally get their decision that will likely trigger an explosion of wild price action through the Powell press conference at 2.30 PM.  If that’s not enough to keep traders and investors on edge, we have nearly 350 earnings reports ADP, International Trade, ISM Services, and Petroleum Statis numbers to deal with first.  Expect a day jampacked with uncertainty and challenging price action where anything is possible! 

Trade Wisley,

Doug