May 6, 2022
Good morning,
On Wednesday afternoon, during the Q&A session following the end of this week’s Fed meeting, Jerome Powell seemed to perfectly thread the Dove/Hawk needle for investors, and the equity market shot up +3.01% (by S&P 500 measures) on the day. Apparently, with a night to sleep on it, bond market participants in particular thought differently of Powell’s handywork and pushed yields on almost the entire Treasury complex up through a big psychological barrier – the 3% yield threshold. By the time equity markets opened Thursday morning and saw 3-handles on most Treasuries, Powell’s hours-old comments became “so yesterday”, and all of Wednesday’s gains, and then some, were quickly reversed – the S&P dropped -3.56% on the day. For all that action, the S&P is basically flat on the week (+.36%) going into today’s trading session. Never a favored number – it’s a crowd, and a crap at the tables – everything is coming up 3’s this week.