Market Minute with Kenny Polcari: Dec. 12, 2022
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| By Kenny Polcari |
Let’s get right into it, folks, and talk about what happened toward the end of last week because it was a dramatic one for the markets.
Indeed, we saw the market sell off four out of five days, then it rallied in anticipation of what it expected to be a weaker Producer Price Index report, showing that prices at the producer level were coming in fairly sharply.
Well, we got the report Friday morning, and while it was weaker and trending lower, the PPI number was not as weak as the markets expected or traded on the day before.
There was a little bit of an overreaction, with futures immediately turning sour — they were up prior to the opening, then turned sour after that number came out. Then the market really struggled all day, only to sell off fairly substantially as we moved toward the closing bell.
In fact, the Dow ended the day down 300 points and the Nasdaq down around 100 points, with the S&P and Russell indexes both under pressure, as well.
But now it’s time to look at …
The Week Ahead
There are three big things happening this week, and they’re all taking place around the central banks.
Additionally, the Consumer Price Index — the sister to the Producer Price Index — is coming out on Tuesday, and we’ll look out for what that tells us.
Now, there’s anticipation for the CPI to also be lower than what it was last month … but after Friday’s PPI report, there’s now some question about what the CPI report is going to show. Keep in mind that the report will show a day before the Fed’s Federal Open Market Committee meeting, which starts on Tuesday and ends on Wednesday, with the results of the rate decision being announced at 2 p.m. Eastern.
There’s no debate about what the rate decision will be — it’s going to be 50 basis points and that’s it. They’re not going to veer off of that. But the surprise is potentially going to be what Jerome Powell says in the press conference. Will he maintain his hawkish tone or will he give any indication that he’s softening up at all into dovish territory? We’ll have to wait and see.
In my mind, Powell needs to maintain the narrative and remain aggressive to move forward. And, he needs to remind investors that the Fed is not going to stop raising rates until they get to the point where they feel that we’re going to make a significant impact on inflation.
Find out all the details below on what else is going down this week, and what we can expect from the Fed as we move closer to year’s end and into 2023 …
Click here to get my rundown and be sure to check your inboxes tomorrow for the next installment of my weekly video interview series, Wealth & Wisdom.
To your Wealth & Wisdom,
Kenny Polcari
Host
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