- A brutal month comes to an end as the S&P 500 drops by 8.8% and the Nasdaq Composite lost 13.3%. For the week the overall US market fell by 3.43%. International stocks were down by 2.02%. Bonds stabilized somewhat, falling by 0.07%.
- The futures market anticipates a fed funds rate of 2.75% to 3% by year-end, up from 0.25% to 0.50% right now and higher than the 1.9% median projection in March. That has pushed the yield on the 10-year up by 139 basis points this year. As rates move higher p/e multipliers diminish, and that is what has happened.
- The advance estimate of Q1 GDP actually fell by 1.4% annualized after a 6.9% advance in Q4.
- The Fed will likely give guidance on how they will reduce their balance sheet this week. J.P. Morgan anticipates over the next four years, the impact of selling off the balance sheet would be equivalent to 2.1% in rate hikes.
- With about 70% of S&P 500 companies reporting so far, Q1 profits are on pace to grow by more than 10%. But the market has not been happy with big tech, which carries most of the market weight, AAPL was down 3.7% on a disappointing outlook and GOOGL down by 4.6% last week. The big hit was Amazon, dropping by 14%.