April 27, 2022
The bearish narrative includes: 1) an aggressive Fed-led global tightening cycle; 2) persistently high inflation data exacerbated by spiking commodity prices following Russia’s invasion of Ukraine and; 3) China’s Covid lockdowns and associated supply chain concerns. All three of those headwinds remain, but haven’t grown in intensity lately.
Next: Earnings from AAPL and AMZN after tomorrow’s close is the next major catalyst on the calendar, followed by three inflation reports Friday morning. Immediately following Friday’s inflation reports, markets will quickly shift the focus to next Wednesday’s Fed policy decision. A 50bps rate hike is widely expected, and the most equity-friendly outcome would involve a more moderate balance sheet pace.