Market Wanted Sweet, Dovish Whispers; Fed Gave It a Stern Talk, Instead

The market was hopeful the Fed Chair Jerome Powell would whisper some sweet dovishness, while discussing some impending interest rate increases.

It was badly disappointing. By the time the press conference ended, Fed Fund futures were pricing in six rate hikes out to February 2023.

The good news is that Powell pulled no punches. He set out the worst-case scenario, and that will help the market to price in this negative news. It is already will on the way. So far, the S&P 500 has its worst start to any year in history.

Along with the Fed, we have plenty of earnings news to navigate as well. Microsoft (MSFT)  did a nice job of bouncing back from an initial negative reaction, and now Tesla (TSLA) has a chance to do the same. It is down 3% on its report, which beat both revenue and eps estimates.

The market action continues to be extremely chaotic and is being jerked around to a much greater degree than normal by computer algorithms. It makes stock-picking extremely difficult, but there are opportunities if you have some tolerance for big moves.

I think there is a good likelihood we may see some dip buyers tomorrow.

Have a good evening. I'll see you in the morning.

(Microsoft is a holding in the Action Alerts PLUS member club. Want to be alerted before AAP buys or sells MSFT? Learn more now.)

At the time of publication, DePorre had no position in any security mentioned.