It's Month End. What's Priced In?

Good Morning Everyone!

Remember, as bad as things may seem, history is on our side. The average midterm year – like this one – is typically down as of October 5. It finishes, however, up 6% on average.

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Prices as of 4 pm EST, 8/30/22; % YTD

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MARKET UPDATE

Month-to-date

• S&P 500  -3.5%

• NASDQ  -4.1%  down 6% since Jackson Hole

• TSX   -0.9%

Post Jackson Hole, we are starting to get fresh 52-week lows - As of yesterday’s close:

• Anheuser-Busch (NYSE:BUD)

• Comcast (NASDAQ:CMCSA)

• Intel (NASDAQ:INTC)

• 3M (NYSE:MMM)

• Verizon (NYSE:VZ)

• Newmont (NYSE:NEM)

What’s priced in for the September 21 FOMC meeting?

• Today                    Federal Funds Target Rate 2.25%-2.5%

• 70% chance        75 basis points hike on September 21

• 30% chance        50 basis point hike on September 21

• 75- point hike    Takes Fed Funds Target Rate to 3-3.25%

• 50-point hike     Takes Fed Funds Taret Rate to 2.75%-3%

Bigger picture of what is priced in for the Fed Funds Rate

• By year end        3.5%-3.75%

• By early 2023      3.75%-4%

• 2nd half 2023       2 rate cuts to 3.25%-3.5%

All of these expectations will change as we get fresh new data

2-year Treasury

Crude    89.50     -2%

• Oil is headed for a 3rd monthly drop

• The longest losing run in more than 2 years

3-day halt of the Nord Stream pipeline started Wednesday

• Germany & France said they are prepared for further supply disruptions thanks to gas-storage refills

Toyota (NYSE:TM) / World’s biggest automaker

• Will invest $5.6 billion to boost electric car battery production

• Battery production expected to begin in 2024

SNAP (NYSE:SNAP) -8%

• Netflix (NASDAQ:NFLX) is hiring 2 top execs from SNAP to work on ad-supported service

• SNAP plans to lay off 20% of its employees

Earnings

• CrowdStrike (NASDAQ:CRWD)  flat

• HP (NYSE:HPQ) -7%, miss and guides lower, demand for PCs and Print weak

• Hewlett Packard (NYSE:HPE) +1%      

• Chewy (NYSE:CHWY) -10%, cutting guidance

CRYPTO UPDATE

Seven Seven Six to launch $177 million crypto fund

• VC firm led by Reddit co-founder Alexis Ohanian

• Kryptós will debut October

• “It’s on sale. Everything is on sale.” - founding partner Katelin Holloway

Animoca raises another $100 million

• Asian blockchain gaming giant

• Now valued at $6 billion

• Over 340 portfolio companies (incl The Sandbox and Decentraland)

Crypto Fear & Greed