Weekend Update 6/20/2022

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

Markets sink with Fed forced to aggressively hike rates to combat surging inflation

⚔️  Fed on offense. Fed hiked rates by 75 bps-largest in 28 years. Last week’s higher CPI sent Fed scrambling to stymie out-of-control #InflationFears#RisingYields expected to end year up an additional 175 bps to 3.4%. We expect Fed to maintain aggressive stance front-loading rate hikes to curb inflation at all costs.

📉  Incoming recession? With persistent elevated #InflationFears and ongoing supply chain disruptions from #UkraineCrisis and #COVID19 China lockdowns, it’s less and less likely an aggressive Fed can softly land the economy. With #RecessionWatch odds and severity increasing, investors fleeing markets sending S&P 500 down -6% last week.

💻  Tech layoffs. With #RecessionWatch likely incoming and weak #ConsumerNoConfidence signals, tech layoffs have begun following hiring freezes a month ago. Some companies reducing headcount significantly by up to 20-25%. After minimal impact from past recessions (2008 Financial Crisis and 2020 COVID19), looks like the tech party may be over.

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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.