Friends

It was another volatile day for the markets. The Dow had the most difficult day as one of its most heavily weighted components United Health had a miserable earnings report. But if you take away United Health the market averages ended up mostly flat for the trading session. Today’s main event headline wise was the President’s displeasure with the Fed Chair. Chair Powell has another year left to his term and the markets would be disturbed if he didn’t finish it. We mentioned yesterday that the Fed is now between a rock and a hard place. With inflation still a concern, the Fed will be reluctant to lower the Fed Funds rate. I think they will only move if the markets deteriorate much further. I have also maintained that lowering short term interest rates (the only one that the Fed controls) does not necessarily mean that long term interest rates will fall accordingly. As a matter of fact, I think they will rise just like they did last year when the Fed moved from 5.5% to 4.5% on the Fed Funds rate. When/if the Fed lowers rates, it increases the possibility that inflation is restoked. Inflation is not kind to the long end of the yield curve.

As for today, by the close the Dow Jones Industrial Average was down 527 points to finish the day at 39,142. The S&P 500 was up 7 points to close at 5,282. The Nasdaq Composite Index was down 20 points to close at 16,286. Gold was down $11 to trade at $3,334 per ounce, while oil was up $1.78 to trade at $64.25 per barrel WTI.

Remember, the markets are closed for Good Friday tomorrow, so we’ll be back with you on Monday. Also, we are moving our office on Monday. Don’t worry, the building actually asked us to move up one floor. So, we’ll still be in the same place just one floor higher. I think they want to test my resolve to continue to climb the stairs every morning.

Anyway, have a great Easter weekend and we’ll talk to you next week.

Jim