Trade Findings and Adjustments 12-15-22

Keve Bybee – keve@hurleyinvestments.com

What happened this week?

• Fed meeting on Wednesday with a 50 BPS rate hike
• We had protected stocks for this event and also had SPY puts for extra protection up at 399 strike.

FOMC meeting:

• FED GDP Forecast:
  • 2022 – .5% growth (up .3%)
  • 2023 – .5% growth (down .7%)
  • 2024 – 1.6% growth (down .1)
  • 2025 – 1.8% (unchanged)
• Fed Funds Rate Forecast
  • 2022 – 4.4% (unchanged)
  • 2023 – 5.1% (up .5%)
  • 2024 – 4.1% (up .2%)
  • 2025 – 3.1% (up .2%)
  • Long run – 2.5%
• See inflation gradually declining to 2.5% target by 2025

What now?

• Keeping protection on and adding a second set of protection on stocks IF they break support levels
• Next quarter Q1 will probably be rough for earnings as companies discount products to clear out inventory which will affect earnings numbers badly.
• Q2 will be a turnaround quarter as companies build new inventory that they can sell for better margin
• Should help with a better second half of the year