It was another rough outing, but at least the session was kind enough to start lower yesterday. Red is across all factors, but especially growth and momentum.

Red Tears

The air continues to come out of the most significant stocks known to humankind, and we are reminded they cannot be replaced by other stocks that might move higher, but lack the heft to carry the load.

Market Breadth

Interestingly, there are as many new 52-week lows as one might imagine, considering how fast this drawdown has been. The NASDAQ Composite had one characteristic that turned around the up volume, which was often more significant than the down volume, even on down days. This suggests fewer investors are buying the dip, even in a narrow number of names.

All Eyes on Powell

The Fed will not cut rates today, but there is much hope that Fed Jay Powell will signal that the Federal Open Market Committee (FOMC) will begin to consider easing rates. The so-called ‘Fed Put’ has been in the news big time, but Powell has a lot of stated rules like concern about consumer inflation expectations, but he is also smart enough to know a lot of what's going on and is more about a media campaign. Meanwhile, people who can’t get loans have never been this discouraged, even when they ask for financial help.

There is more than just stock market pain out here – I don’t know if Powell can see past skewed data.

Last Monday, there was a greater than 50% chance for a May rate cut, but that’s down to 18.4% now on the CME FedWatch Tool.

Today’s Session

All eyes are on Powell & Co.  There will be no rate action, but the Fed updates its economic projections. Wall Street has retreated to a general belief that there will be a soft landing, which would cement a strong place for Jay Powell in the pantheon of Fed chairs.

The SEP Guessing Games

Goldman sees unemployment staying the same with higher inflation in the Fed’s projection today, but still two rate cuts this year.