Hurdles remain - for this market as far as big-caps in-particular, while despite what may have seemed like a confusing 'Powell News Conference', what's all important is what was 'not' in the FOMC formal Statement.

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FOMC omitted a recurrent line: 'anticipating more hikes may be appropriate'.

That's the crux of the Fed activity today, and while I was at SPIE (Defense & Photonics gathering), just listening to excerpts while driving back, it seems to me that Chairman Powell was basically 50/50 about future hikes or not, while the formal Statement leaves open the possibility that they are 'done'.

What that statement will 'not' say is how long Funds Rates will stay relatively high, nor whether we have further landmines in the Banking sector, which I'm thinking we probably do, but that it will be handled. None of that is comforting, but probably realistic.

In-sum: 

Tonight's comment is somewhat brief due to spending this afternoon enlightening myself more about 'space', 'sensors', 'materials' or even 'infrared' applications I hadn't entirely considered, including miniaturization of IR lenses and miniature LiDar and Laser systems, both for commercial and military use.

The Fed comments and responses seemed 'business as usual' and almost a spin suggesting this are just percolating along, which they are not. The Fed's likely a bit too restrictive, and has been since before Silicon Valley's failure.

It is unnecessary to debate whether the Fed cuts or not this coming Summer as what happens in 'banking' will likely determine the Fed's response. Again they are sort-of on their 'track', but they enhance 'deeper and longer' neutrality (at best) due to not moving (along with Treasury and FDIC) to clearer policies that might reassure Americans, and larger blanket coverage's for businesses.

Fueling future Fed moves will be (as often is) 'data dependency'. Odds now in fact are a bit better for what we've expected likely, a 'softish' landing. Neither a hard nor soft landing, but something in-between.. based on huge spending as continues for infrastructure, Defense, and .. which nobody mentions.. costs of recovering from (mostly climate-related) natural disasters, flooding etc.

For that we have to allow for some lower consumer discretionary spending, in some areas and some sectors, again too disparate to be more specific yet. An example would be California, where everything is 'off the wall' expensive and families have to allocate more to 'basic' needs. Not exactly due to budgets, it's sad to hear Jamie Nordstrom announce Nordstorm's (JWN) leaving San Francisco, due to 'changing demographics' and crime as it was basically stated (noting that San Francisco used to cater to different types of people with 'taste'.)

Well to that I will say has fashion changed too, when you have everyone from Apple's Tim Cook to Meta's Zuckerberg showing up constantly in Tee-shirts, well that is not a big money maker for higher-end stores (casual office and remote work is the enemy of upscale stores, casual is mostly routine now).

Speaking of Apple (AAPL), it's down a few points and probably the S&P's jitters to a degree relate to whether it drops maybe 10% (more or less) or manages the harder effort of holding after guidance. Powell wants a weaker labor market, they want less involvement with China, and you also have the off-season for 'hardware' sales (with iPhone 15 coming in September.. slower before then).

After the Close PacWest Bancorp fell 'in-half' as they announced they're now exploring sale, so again evidence that the banking system isn't entirely fine. I should note that Schwab closed at a two-year low and JP Morgan Chase did drop substantially too. Also lower, but unrelated, was Qualcomm (weaker guidance and unable to diversify away from 'handsets' as of yet). Mixed bag late today, many small stocks held decently, while Nvidia (NVDA) sold off sharply.

I think Qualcomm (QCOM) saying they haven't seen an improvement in China was the kicker there, while they alluded to losing Apple in 2024. (Apple is a huge 20% modem-only customer, so we continue watching, but not buying, Qualcomm.) I note that Apple reports tomorrow. I expect to see Apple shares lower.

Bottom-line: 

Now Fed decisions will be made 'meeting by meeting' and that is just fine, and probably as it should be. There are not plans for hikes or cuts is the takeaway, and that's fine. Definitely better than having paused and said they'll look at it in June (which would be a different level of uncertainty).

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Market Briefing For Tuesday, May 2 '23
Market Briefing For Monday, May 1 '23