The major US stock  indices  snatched victory from the jaws of defeat - at least for the Dow industrial average and S&P index. The NASDAQ index still closed negative on the day as did the Russell 2000. However, both indices had moral victories after erasing most of the intraday declines (the Nasdaq was down -3.10% at session lows).

At session lows:

  • The Dow industrial average was down -617.37 points or -1.98%
  • S&P index was down -90.29 points or -2.31%
  • NASDAQ index was down -352.81 points or -3.10%

At the end of the day:

  • Dow industrial average rose 7.45 points or 0.02% at 31260.57
  • S&P index rose 0.60 points or 0.02% at 3901.38
  • NASDAQ index fell -33.87 points or -0.30% at 11354.63
  • Russell 2000 fell -2.95 points or -0.17% at 1773.26

Fed's Bullard speaking on FOXBusiness was anticipated by markets. Stocks were trading near low levels as he started to speak, with expectations he would be ultra hawkish.

Instead he maintained that he prefers 50 basis point hikes (and not 75 or 100 bps). He sees above trend growth going forward. He sees employment moving lower to perhaps less 3%, and does not see a recession in 2022 or 2023.

He DOES expect rates to rise to 3.5% by the end of the year which implies 50 basis point hikes at each Fed meeting until then. However, that is the cost of doing business to have his upbeat economic viewpoint.

Stocks started to bounce soon after he was done speaking.

The bad news for the indices is:

  • The Dow still closed lower for the 8th consecutive week which has not been done since 1923
  • The S&P and NASDAQ index also closed lower for the 7th consecutive week.

For the week:

  • Dow industrial average fell -2.9%
  • S&P fell -3.02%
  • NASDAQ index fell -3.28%

The last month of trading has seen:

  • Dow industrial average -10.15%
  • S&P index -11.18%
  • NASDAQ index -13.81%

Today the S&P index broke into bear market territory with the index falling -20.9% from its all-time high. However, the end of day rally has led to a close around -19% from that all-time high. Closing in bear market territory was averted.

The  NASDAQ  index reached a new year - and cycle - low and traded down -31.93% from its all-time high reached in November before rebounding.

The Dow industrial average also reached a new cycle low as it fell to -17.09% from its January all-time high before rebounding into the close.

Next week earnings will be highlighted by:

  • Zoom on Monday.
  • Toll Brothers and Best Buy on Tuesday.
  • Snowflake, Box, and Nvidia on Wednesday.
  • Dell, Macy's, Costco on Thursday.

All have the potential to tell a story about the market, the economy and inflation.

  • Zoom is considered a pandemic stock, but does it have a more lasting place post pandemic?
  • Toll Brothers expectations for future growth will be of interest as the Fed tries to slow down the rampant housing market
  • Best Buy is another retail barometer. Will it show signs of slowing and price issues?
  • Snowflake is one of those growth companies whose earnings have to grow into their elevated stock price. Even so, it's stock is down -63.46% from its November high
  • Nvidia is the darling of the chip stocks, but is down -48% from its all-time high
  • Dell is barometer for of computer demand
  • Macy's a brick-and-mortar retailer is trying to do more business online. What do they see from the consumer?
  • Costco as close as April 8, traded at its all-time high price. The last 6 weeks have seen the price move down -32%. The stock is closing below its 100 week moving average this week at $416.43. The high price in early April was $612.27.

This week both Walmart and Target disappointed and spoke to margins being hammered by higher costs. Their earnings changed the tone of the stock market and views on the economy, inflation and even the Fed (will they bite the bullet and go 100 bps). Fed's Bullard eased some of those fears at least for now.