Kristal Daily Jan 24

It was a brutal week in US equity markets last week with all major indexes ending the week below their respective 200-day moving avg support levels. S&P 500 index had its worst week since October 2020 while the Russell 2000 Index performed the worst since June 2020 on a weekly basis. All S&P 500 sectors ended the week in red with utilities down the least at 56 bps and consumer discretionary down the most at 8.19% followed by the tech sector which was down 6.9%.

10-year treasury yields continued to rise early last week and breached the 1.85% levels around mid-week. However, the continued risk-off environment in equity markets finally forced the traders to bid the bonds on Thursday and Friday.

It was a sea of red in crypto markets as well with investors getting spooked as Fed is about the end the easy money era that has helped these risk-on assets in 2020-2021. Bitcoin fell close to 17% into mid-30,000’s but managed to find support around 34k levels. Ethereum was down 26% on the week and is trading close to 2400 now.

This week big tech starts reporting earnings with Microsoft (Tuesday),?Tesla (Wednesday) and Apple (Thursday) being a few notable ones. Bulls will be hoping that these earnings can help provide a temporary bottom to the tech complex and get the relief rally started.

?We also have the FOMC this week which will be closely watched for any clues regarding Fed’ stance (if any) of the 50 bps rate cut chatter in March that has started doing the rounds lately. Markets would also be keen to see if Fed gives any timelines for starting the balance sheet run-off.

Overall the week is expected to be volatile and relief rallies can be short-lived. Be nimble and good luck out there!

"The best stock to buy is the one

you already own."

-- Peter Lynch