Stocks End Mixed On Conflicting Russia Reports And Fed Minutes

Plus 5 New Strong Buys for Today Stocks End Mixed On Conflicting Russia Reports And Fed Minutes [Kevin Matras - EVP - Photo] Profit from the Pros By Kevin Matras Executive Vice President Stocks End Mixed On Conflicting Russia Reports And Fed Minutes [Stocks End Mixed On Conflicting Russia Reports And Fed Minutes]Image: Bigstock Stocks closed mixed yesterday with the Dow and the Nasdaq finishing modestly lower, while the S&P finished modestly higher. The markets opened lower after reports that refuted Russia's assertion that they had moved some of their troops away from the Ukrainian border. And stocks stayed underwater for most of the session. But then they headed back up after the FOMC Minutes. There was nothing in there that was new or surprising. Most agreed that they should wrap-up their bond buying in March as they had communicated earlier. Many agreed that they should begin reducing their balance sheet later this year. And comments were made that if inflation does not moderate, that they should remove policy accommodation at a faster pace (i.e., raise rates quicker and begin their balance sheet runoff sooner). The talk of hotter than expected inflation lately, and their concern that it has not gone down, does give more likelihood that we could see a 50 basis point rate hike in March rather than the 25 basis points that many had been expecting just a few short weeks ago. In fact, this has led some to speculate that the Fed could even make an inter-meeting rate hike, before their scheduled March 15-16 meeting. But the Fed has acknowledged that while there's a risk in moving too slowly, there's also a risk in moving too quickly and surprising the market (which an inter-meeting hike would surely do). If there were any surprises in the minutes, it would probably be that they weren't more hawkish. But they were hawkish enough. Enough to legitimately tackle inflation and their record high balance sheet, but not overly so as to stymie the economy or the labor market. Stocks came off their high by the close to settle narrowly mixed across the major indexes. In other news, Retail Sales surged 3.8% vs. views for 2.0%. The Import and Export Prices report showed import prices up 2.0% m/m (the biggest jump in 11 years), and 10.8% y/y. Export prices were up 2.9% and 15.1% y/y. Business Inventories rose 2.1% vs. last month's upwardly revised 1.5% and views for 1.8%. Industrial Production was up 1.4% m/m vs. the consensus for 0.4%. But MBA Mortgage Applications fell -5.4% w/w with the purchase index down -1.0%, and refi's down -9.0%. And the Housing Market Index slipped to 82 from last month's 83 and views for the same. As I said yesterday, while inflation, uncertainty over the size of the Fed's expected rate hike, and the threat of war between Russia and Ukraine are negatives, there's plenty of positives in the market right now, including the strength of the economy and the labor market, record corporate profits, falling Omicron cases, and the lifting of Covid restrictions. And with the positives looking stronger than the negatives, it looks like there's a lot more upside to go for both the economy and the market. So make sure you're taking full advantage of it. Because there's no denying we are in the midst of an historic bull market (recent volatility notwithstanding). So don't squander this time with preventable mistakes. To learn how to put the probabilities of success in your favor on your very next trade, be sure to check out our latest commentary... 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