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This market just continues to forge ever higher. The S&P 500 closed at new all-time highs four times last week. The index is now up 15% YTD, and we’re not even at the halfway point.

Monday was a bloodbath in the market. All three indexes posted massive losses. The Dow was down 2.6%, the S&P fell 3%, and the tech-heavy Nasdaq fell 3.43% on the day. The indexes recovered some of the losses on Tuesday. What can we expect going forward?

This year begins in 2022 form, lower. Although the calendar changed, the issues that have pressured stocks lower over the past month remain. There is still great uncertainty regarding inflation, the Fed, and a recession.

The year has certainly started out in fine fashion. The S&P 500 has delivered positive returns for all four weeks so far this year. The S&P is up 6% YTD and the Nasdaq is up 11% YTD, as of Friday’s close.

But earnings have been lousy so far this quarter, with the average S&P 500 company that has reported so far posting -5% earnings growth from last year’s quarter. But the market was expecting that. Investors know there will be a declining economy this year, and the sooner it declines, the sooner the Fed will be done hiking rates.

It’s really the holiday season now. This time of year, investors stop paying attention to the market, like during the last days of the summer. That means, in the absence of game-changing headlines, stocks probably won’t do much of anything until the rubber hits the road after New Year’s.


When sobered up investors take a fresh look at stocks in January what will they see? They’ll see what they saw before they stopped paying attention, a lot of uncertainty.

After good news on inflation, the market awaits the Fed’s rate decision and comments later today. It could lead to a rally or a fizzle.

Inflation for November was less than expected with CPI at 7.1% versus an expected 7.3% and core inflation at 6.0% versus an expected 6.1%. It’s welcome news that inflation is moving lower and has probably peaked, down from 9.1% in June. But it’s still a long way from the 2% Fed target.

The market is making some noise so far this year. And in a good way. The S&P 500 is 7.7% higher and the Nasdaq is up 14.7% YTD. Is this real, or just another head fake?


The rally is being prompted by increasing optimism of a soft landing, where inflation falls without the economy falling into recession. Previously pessimistic pundits are now embracing the possibility. And there is some evidence to back up the soft-landing scenario.

It been a good start to the year, with the S&P 500 up over 4%. There is optimism that the Fed will lose its hawkish nerve as inflation falls and the economy turns south. Inflation was lower again in December, with CPI of 6.6% versus 7.1% in November and 9.1% in June. At the same time the economy is weakening, and most economists are predicting recession this year. Since markets tend to anticipate six to nine months into the future, it might not be that long until investors start sniffing out the end of the inflation/Fed conundrum and past the recession into a recovery.

After five consecutive up months for the market, April has been a bummer. Is this just an overdue end to the recent rally or something worse?

The S&P 500 is down 3.6% so far in April. But the more interest rate-sensitive sectors have faired far worse. Sure, the rally was long in the tooth anyway. But the narrative has also changed for the worse.

The market has been good for a while. The S&P 500 is up roughly 11% YTD and about 30% since late October. But I expect choppier waters ahead.

The main driver of the S&P has been the technology sector, which is being driven higher by the artificial intelligence catalyst. Most of the rest of the market seems to be at the mercy of the interest rate narrative. And that seems to change every couple of weeks nowadays.

The market has regained its footing, and here comes Nvidia (NVDA).


All eyes are on the Nvidia earnings report scheduled to come out after the closing bell on Wednesday. It was an Nvidia earnings report two years ago that featured a massive demand for artificial intelligence products and services that sparked the AI craze and ignited a powerful rally in technology stocks.

Just when things were getting seriously ugly, the market started having a great week.

Interest rate disappointment is being replaced by earnings anticipation. The new earnings season came in the nick of time. After five straight up months, the S&P was having a terrible April. Last week was the worst week of the year so far and the index has fallen over 5% from the recent high.

It’s been a great market for a while. But it has leveled off since the middle of May. I expect more of the same going forward.

The S&P 500 pulled back in early April after a five-month rally as sticky inflation soured the interest rate narrative. The index then recovered to new highs in the middle of May on an improved interest rate outlook. But stocks have since leveled off as the interest rate outlook got stuck in the mud.

It’s been a good month in the market, so far. The S&P 500 has regained all the dip from April and is now within a whisker of the all-time high. The driving forces have been an improving interest rate story and solid earnings.

With 92% of S&P 500 companies having reported, earnings increased an average of 5.4% over last year’s quarter. But it’s better than that. If you take out the report of Bristol-Myers Squibb (BMY), average earnings growth would be 8.3% for all the other stocks on the index. That’s a strong gain.

The market had a great start to the year and then slumped in February. March started off with the best week in a month for the S&P 500. What’s next?

There will be a lot of information coming out this month that could determine whether the market rallies or slumps from here. This week, the Fed speaks and the February jobs report comes out. These events could give investors a better idea of how aggressive the Fed will remain.

We were rolling along in a choppy market to nowhere as the sticky inflation/hawkish Fed conundrum promised to play out for longer than hoped at the beginning of the year. But over the past several days a Black Swan event popped up, the failure of Silicon Valley Bank.

Things are looking up in the market. The S&P 500 soared 3.5% last week and is now more than 7% higher YTD.

Investors love that the banking issues have had the benefit of tempering the Fed with no apparent offsetting crisis, so far. The expected timeline for the Fed to stop raising rates has moved way up, to one more rate hike from what could have been a hiking cycle that lasted the rest of the year.

It’s a big week. The March Consumer Price Index (CPI) report comes out on Wednesday. The number may determine the short-term course of the market.

Stocks have trended higher over the past month as the banking situation has so far tempered the Fed without any offsetting crisis. There now seems to be a greater likelihood of a recession later this year, but investors are also pricing in Fed rate cuts in the second half. That’s the dicey part.

Stocks are bracing for the January inflation report, which comes out today. The number could determine the next thrust of the market.

It’s been a good year so far for stocks, despite the slight pullback last week, as investors embrace the notion of falling inflation and a Fed that will finish raising interest rates around midyear. But a bad inflation report could put the kibosh on that optimism and send stocks reeling.

Last week marked the fourth straight week of declines for the S&P 500 and was the worst week so far this year, down nearly 3%.

The problem is inflation, go figure. The Federal Reserve’s preferred measure of inflation, the Personal Expenditures Price Index (PCE), was much higher than expected in January and showed inflation moving higher, not lower, to start the year.