EB Daily Market Report - Friday, October 7, 2022

Dear Members.

There have been times when the market cheered strong employment numbers, but now is not one of those times. Instead, the market is in full retreat mode after this morning's report provided the Fed with the ammunition it needs to continue to aggressively raise interest rates in its war against inflation.

Though all of the major indexes are down substantially, the tech heavy NASDAQ is leading the move lower with semi-conductor stocks especially weak on lowered guidance by Advanced Micro Devices (AMD.) Weakness in the semi-conductor sector is never good for the market and that has become quite apparent today.

While all of the major indexes were challenging their respective 20 day moving averages the past few sessions, that is no longer the case. Instead, it's possible they could be revisiting their recent lows. In the case of the S&P that low was 3584. Whether or not we see a retest of that level remains to be seen. To the upside, unless the S&P can reclaim its 20 day, currently at 3779, the bears will remain in charge.

Bottomline for now is we need to respect today's selling. The next key economic report will be next Thursday when we'll get the Consumer Price Index (CPI) reading that comes one day after FOMC minutes, both which could be revealing. Then we'll get earnings from major banks later in the week. So it's possible we'll see continued weakness unless we get some type of positive surprise that gives the bulls something to work with.

I want to wish everyone a restful weekend and I will be back on Monday with another Daily Market Report.

At your service,

John Hopkins