Three Things to Know & Watch – 25 April, 2022

Apr 25, 2022

By Bill Hornbarger, Chief Investment Officer

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Three Things to Watch

  • This is a big week for earnings reports with more than 160 S&P 500 members reporting, including the four largest U.S. companies by market cap, Apple, Microsoft, Amazon, and Alphabet. So far in the earnings seasons, positive surprises have outweighed negative surprises by approximately four-to-one. Netflix’s decline in subscribers and a negative earnings surprise has been the biggest news so far in this reporting season.
  • Federal Open Market Committee (FOMC) members are in a pre-meeting blackout from giving talks, but analysts and economists continue to debate the size of the next move and those beyond it. The Fed meets next week (May 3-4) with a press conference scheduled on May 4. Fed funds futures are now priced for a 50basis-point increase at the May meeting.
  • Economic reports this week include updates on new and pending home sales, GDP, consumer confidence, and durable goods orders. The collective data is expected to show continued heightened price pressures and moderating activity.

Three Things to Know

  • Hunter Greene, rookie pitcher for the Cincinnati Reds, made his second MLB start on April 16. Greene threw 80 pitches in his 5 1/3 innings of work versus the Dodgers, including 39 fastballs of at least 100 mph. That’s the greatest number of 100 mph pitches in one game in MLB history (Source: MFS, MLB).
  • The consensus forecast is for the FOMC to increase the target Fed funds rate 50 basis points when it meets next week. The last time the Fed raised rates 50 bps was May of 2000. Every increase since then has been a smaller, 25-basis point-increase. (Source: Federal Open Market Committee, FOMC)
  • The single -largest component of CPI is owner’s equivalent rent. In the most recent CPI report, it had a 23.8% weight and was up 4.5% from a year earlier. The owner’s equivalent rent index measures the change in the renal income foregone by a household that chooses to occupy a dwelling that it owns. (Source: Haver Analytics, Bureau of Labor Statistics)

The above information reflects the current opinion of the author. It is based upon sources and data believed to be accurate and reliable. Opinions and forward-looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security mentioned.