Equity markets rebounded strongly on Wednesday as fear of the Fed was overcome by optimism for earnings growth later in the year. The move was led by tech stocks like Apple and Amazon which gained 2% and 3%, respectively. The S&P 500 advanced about 1.5% at the day's high, closing near the highs and shy of a 2-week high. If the market can advance again and set a new high, it will open the door for a more significant move.

The risk is that resistance for the broad market is not far above. The 4,100 level has been significant resistance multiple times, and there is reason to believe it will again. The PCE Price Index is due out on Friday and it is expected to confirm the Fed's stance. This means investors should expect at least one more interest rate hike, and for economic pressure to mount.

Equities tread water for a 2nd day as traders brace for what could be a monumental PCE report. The report is expected to show moderating albeit hot inflation and give the FOMC a chance to pause and take pressure off the economy. The risk is that consumer-level inflation will be hotter than expected or accelerate in the coming months. For the FOMC, whose task is to tamp down inflation, being "certain" may be more important than giving the market what it wants.

A rise in the ten-year treasury suggests that some in the market expect a hot PCE figure, which may be wise. If not for the SVB crisis, the market would still expect such news and a 50 basis point hike from the FOMC. The only thing that has changed is a bank failure that has little to do with inflation. The real takeaway is that businesses are tightening across sectors and industries, which will be felt and seen in the 2nd half results.

Equity markets started the weak on stable footing but could not post substantial gains on Monday. The move is partly due to easing fear of a banking crisis compounded by uncertainty about the PCE data on Friday. The analysts expect core PCE to moderate to 0.4% month-to-month but remain hot at 4.7% YOY. At this level, the FOMC may need to hike interest rates beyond the recently intended target, and there is a risk it will come in hotter than expected.

With only 2 weeks until the start of the Q2 peak earnings reporting cycle, the market is bracing for what could be a very bad season. The consensus target for Q1 earnings is below -6.0% and it could be worse by the end of the season. The details that will more the market are the guidance and outlook for the 2nd half of the year, if those take another hit this market will move one step closer to another major sell-off.

Equity markets went on a topsy-turvy ride last week due to rising fear of a banking crisis and the FOMC. The FOMC went ahead and hiked another 25 basis points, indicating another hike is on the way. The risk for the market is that PCE data is due out next week and may not give the Fed much choice on the future of interest rates. The S&P 500 closed higher for the week but showed resistance at the 150-day moving average.

This will be another trying week for the market. Investors and trades will be on edge, waiting for the next bank to fail, and there will be little in the way of economic data or earnings to sustain action in the interim. The S&P 500 may be able to move higher on the lack of news, but a sustained rally is far from likely.

Equity markets tried to rebound on Thursday following Wednesday's Fed-induced rebound but the takeaway for investors is failure. The S&P 500 advanced more than 1% at the high of the day only to meet with resistance and give up the gains by the end of the day. The index closed with gains, but the candle formed is black and confirms resistance at the short-term moving average. If the index cannot close above the short-term moving average today, it could lead to intensified selling next week.

Next week could be another tough one for investors. The economic calendar is light but includes the PCE Price Index on Friday. The latest CPI index showed a cooling of inflation but not a decline, which may be repeated in the PCE data. The caveat is that PCE data is expected to be hot and confirm the need for high interest rates if not higher interest rates.

Equity markets retreated on Wednesday after remarks from Fed Chief Jerome Powell failed to soothe the market. Mr. Powell says the committee may only hike rates one more time this year but also that inflation is yet to be tamed, and the committee is ready to hike rates again if needed. In addition, Mr. Powell seemed supportive of the financial system but failed to give explicit details of how the system could be backstopped.

The S&P 500 fell more than 1.6% at the end of the day, confirming the latest stock downtrend. The move confirms resistance at the 4,000 level and the 3rd lower consecutive peak since the bear market rally began. This could signify lower lows, but support may be present at 3,800. The only thing certain now is uncertainty, which will not be good for the market. In this light, 3,800 may only be a stopping point on the move to retest last year's lows.

Equity markets advanced on Tuesday in hopes of further backstopping for the ailing bank industry. The news includes a new deal for First Republic Bank and a push from Treasury Secretary Janet Yellen to expand the FDIC insurance program. The S&P 500 gained over 1.25% on the news and regained the upper side of the 30-day moving average, a potentially bearish sign.

The next hurdle for the market is today at 2:15. At 2:15, the FOMC will announce the next policy adjustment, which is expected to be a 25 basis point increase in interest rates. The risk for the market is the rhetoric which is also expected to be firm. Inflation isn't tamed despite the banking crisis, and it may not fall significantly unless the FOMC causes more weak economic links to fail.

Equity markets rebounded on Monday as investors hoped for FOMC leniency. The budding banking crisis is the first sign of economic cracking and, for some, a reason the FOMC should quit hiking rates. The caveat is that inflation is still high, and the latest data supports the Fed's current policy stance. However, the FOMC may only raise by 25 basis points but issue a firm statement that says the committee will act when the data is hot.

A new round of aid for trouble bank First Republic helped soothe fears of contagion. A consortium of banks led by JPMorgan Chase & Co. is seeking ways to raise capital for the bank and shore up its balance sheet. Among the possibilities are dilutive share sales and an outright bank sale. Meanwhile, the banking fallout has investors in the EU on edge, which is another sign that global economic conditions are on the brink of collapse.

Equity markets ended a mixed week on a down note Friday, falling more than 1.0% at the day's low. The S&P 500 enters this week on an uncertain footing with an FOMC meeting on tap. The market is pricing in a 25 basis point interest rate hike, which is likely, but it is also pricing in a lower peak than last week. This is a risk, given the state of inflation and the most recent FOMC commentary. Given the Fed's stance, the new policy statement is more likely to support the idea of higher rates for longer.

Ultimately, the outlook for earnings will keep the market moving in one direction or another. As it is, the consensus figures for the year continue to decline and weigh heavily on the S&P 500. Some stocks are set up to rebound during the spring, but more will remain range bound or fall to new lows.

Equity markets rebounded on Thursday as investors embrace the potential for a financial backstop in the banking sector and hope the FOMC eases back on the rhetoric. The S&P 500 gained nearly 2.0% at the session's high and may continue to rebound, provided good news continues. The risk is that woes in the banking sector will continue to spread and darken the outlook.

Next week will be a pivotal week for the market. The FOMC is slated to announce the latest policy change on Wednesday, which could spook the market again. Signs of cracking in the banking sector are not a reduction of inflation; that is what the FOMC needs to accomplish its goals. Given the strength in this week's CPI report, the FOMC may not ease up all that much. Investor should expect at least a 25 basis point hike and the indication hikes would continue if the data warranted.