Unexpectedly Intriguing!
07 March 2022

The S&P 500 (Index: SPX) continued following its now well-established 2022 downtrend in the first week of March 2022. The index closed out the week at 4,328.87, some 1.3% below where it closed the previous week and 9.8% below its 3 January 2022 record peak of 4,796.56.

That puts the actual trajectory of the S&P 500 well within the alternative futures chart's latest redzone forecast range.

Alternative Futures - S&P 500 - 2022Q1 - Standard Model (m=-2.5 from 16 June 2021) - Snapshot on 4 Mar 2022

The biggest market moving news of the week came on Wednesday, 2 March 2022, when Federal Reserve Chair Jerome Powell testified before Congress the Fed's first interest rate change of 2022 will be a quarter point hike. That change in monetary policy will be officially announced and implemented after the Federal Open Market Committee's 16 March 2022 meeting.

Powell left open the possibility of a half point rate hike being implemented later in the year, where other Fed minions suggested such a move may come in the first half. That new information gives investors a strong incentive to focus on the upcoming second quarter of 2022 in setting their current day investment decisions. That works well with the redzone forecast, which was built with that assumption.

Here's the rest of the marketing moving news in the week that was:

Monday, 28 February 2022
Tuesday, 1 March 2022
Wednesday, 2 March 2022
Thursday, 3 March 2022
Friday, 4 March 2022

The CME Group's FedWatch Tool continues to project six quarter point rate hikes in 2022, starting in March 2022 (2022-Q1), followed by additional hikes in May 2022 (2022-Q2), June 2022 (2022-Q2), July 2022 (2022-Q3), September 2022 (2022-Q3) and December (2022-Q4). That last rate hike represents the only change from the previous week, as investors expect the Fed will delay this last hike from November 2022.

The Atlanta Fed's GDPNow tool reduced its projection of real GDP growth in 2022-Q1 down to 0.0% in the past week based on the latest update to the quarter's international trade data, which points to a much bigger trade deficit than previously expected.

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