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
