All Eyes On The Fed

“The path to innovation begins with curiosity.” – Robert Iger

It’s not often that one of the top stories on the lead into a mainstream show like “The Today Show” is a Fed Meeting (don’t ask us how we know), but that was the case this morning as market volatility has made its way into the mainstream zeitgeist.  Futures are sharply higher this morning with S&P 500 futures trading up 1.5% and the Nasdaq up by over 2%.  After dropping sharply immediately after it reported results last night, shares of Microsoft (MSFT) reversed course and are now up over 5%.

The economic calendar is light today with Wholesale Inventories at 8:30 and New Home Sales at 10 AM, but the Fed will take center stage this afternoon with its 2 PM announcement and 2:30 Powell presser.

It’s been a volatile start to 2022 so far as the Nasdaq is currently on the pace for its 11th 1%+ daily move in 17 trading days so far this month.  At a rate of just under 65%, this would rank as the most volatile month for the S&P 500 since March 2021 but is nowhere near the levels of volatility that were experienced during the COVID crash.  While this month hasn’t been nearly as volatile as early 2020, looking back all the way to the start of 2010, there have only been a handful of other months where the percentage of daily 1% moves for the Nasdaq in a given month was higher.

Looking further back, though, investors have been relatively spoiled by the lack of volatility.  During the Financial Crisis and before that, leading up to the peak of the dot-com bubble, the Nasdaq routinely experienced 1% daily moves during many months.