Weekend Update 5/8/2022

Weekend Update recaps market highlights and major news from Ursa’s portfolio. Not on Ursa yet? Download Ursa from the App Store!

Market whiplash as investors initially cheer 50 bps rate hike

🥂  It’s NOT 75 bps… Fed continued aggressive #RisingYields plan raising target fed rate by 50 bps to 0.75% to 1% and planning to begin balance sheet reduction in June. Fearing a 75 bps hike, investors initially cheered commentary sending S&P 500 up +3% on Wednesday.

🤢  …next day hangover. Premature celebration as investors reversed Thursday sending S&P 500 down -4%. Wasn’t the feared 75 bps hike, but 50 bps already the largest rate hike in 20+ years. #InflationFears continue to be significant issue escalating with ongoing #UkraineCrisis impact on energy and commodities. Meanwhile aggressive #RisingYields counter action increasing #RecessionWatch odds.

📘  Earnings wrap. Earnings were an afterthought with the Fed commentary whiplash midweek. Hard to believe the S&P 500 only ended slightly down -0.2% given the week’s volatility rollercoaster. From earnings, we heard mostly similar themes of more cautious outlooks with heavy focus on bright spots like #COVIDRecovery and #RevengeTravel.

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The statements, opinions and analyses presented here are provided as general information. This article is the opinion of the author. Anything within this article should NOT be considered an investment recommendation or advice. See Ursa’s full disclosures here.