Market action was mixed on Wednesday and left the S&P 500 down almost a full percent at the end of the day. Reports from names like Kraft Heinz and Chipotle Mexican Grill beat their consensus estimates while those from big tech, Microsoft and Google among them, did not. The news has Wall Street on edge with not only the PCE pride index but the next FOMC decision only days away. The takeaway from the earnings reports is that economic conditions are having an impact on the consumer and businesses.

The analysts have been revising their expectations for inflation and are now expecting to see the PCE price index accelerate on a YOY basis. The new figure has core PCE rising to 5.2% YOY from the previous 4.9% and puts consumer-level inflation just shy of the hottest levels in decades. At this pace, the market should expect the FOMC to issue another 75 basis point interest rate hike and a hawkish statement, possibly more hawkish than what they've stated so far.

Equities rallied again on Tuesday and broke some key technical levels but the breakout may already be over. Reports from key names in tech like Google parent Alphabet and Microsoft may cap gains in Wednesday's session. Both companies showed some weaknesses that could easily carry into the rest of the sector and the economy at large. If this trend continues the S&P 500 will most likely reverse course over the next few days.

The next big test for the market will be on Friday with the release of the PCE price index. The index is expected to moderate on a month-to-month basis but could easily come in hot. Word from companies like Kraft Heinz and General Mills suggests consumer-level inflation is still on the rise and could remain hot well into 2023. If the PCE spooks the market it could add downward pressure to stocks and the next FOMC meeting is just one week away.

Equities markets tried to come out of the gates strong this week with the S&P 500 up on Monday. The move is driven by anticipation of better-than-expected earnings as the peak of Q3 reporting gets underway. This week is the busiest week of the reporting cycle and should bring well over 125 reports from S&P 500 companies. The takeaway is that by the end of the week there will be little doubt as to the health of the S&P 500s earnings power.

Also on tap this week? The PCE price index will be released on Friday and it is expected to cool considerably from the previous month. The risk is that another round of hot data will force the FOMC into another 75 basis point interest rate hike and push the US closer to recession.

Equities experienced some volatility in the prior week as hopeful traders and investors cling to the good news while the pessimistic ones cling to the bad. The good news is that Q3 earnings season is a little bit better than expected, the bad news is the outlook for the future continues to deteriorate and that is weighing on the market.

This week, the market faces an onslaught of earnings reports as well as economic data. Among the earnings reports are several FAANG names which are foundational to the market. Better-than-expected reports from them could provide some relief for investors but the outlook remains dim. On the economic front, the PCE price index tops the list and is expected to come in hot once again. The takeaway will be that the FOMC is on track to continue hiking rates to the 5.0% level regardless of the pace, which is bad news for consumers and businesses alike.

Equities went on a wild ride Thursday first rebounding only to peak out midday on comments from the Fed. Fed President Harker made comments to the effect that inflation was not under control, the FOMC was still hiking rates, and that additional rate increases could be large. The market made an abrupt about-face on the news, confirming resistance at the short-term 30-day moving average for the 3rd day in a row. If the market can not break this trend the odds of a pullback to 3,500 will grow to a near certainty.

The next FOMC meeting is less than two weeks away and the CME FedWatch Tool is pricing in a near 100% chance for another historic 75 basis point interest rate hike. Between then and now, the PCE price index for September will be released and it is likely to be a hot one. The takeaway now is that 75 basis point rate hikes could be on the table until inflation comes down to a manageable level.

The rebound in equities appears to be over as quickly as it began. The S&P 500 fell about 1.0% at the low of Wednesday's session confirming resistance at the short-term 30-day EMA. The move may gain momentum on Thursday and could be driven by earnings as well economic data. On the earnings front, reports from AT&T, Tractor Supply Company, Phillip Morris, and Genuine Parts Company will give a broad look at the earnings situation which has been in a general decline. On the economic front, reports from the housing sector, the manufacturing sector, and the Index of Leading Indicators will point to what the market should expect from the Q4 season when it rolls around.

Next week could be trying for the market. The next big test will be a double-shot in the form of Peak Earnings and the PCE price index. Peak Earnings will bring over 100 S&P earnings reports including some of the FAANG names including Google, Amazon, and Microsoft. If they report better than expected or give good guidance the market could regain traction and begin putting in a real bottom. The risk is the PCE price index, if it comes in hot on Friday the earnings may not matter.

Equities rebounded for another day on Tuesday but eager investors are warned to be cautious. The market opened with a big gain near2.0% which were also near the highs of the session. The highs were consistent with the 30-day EMA which provided resistance and capped gains for the day. At the low, the index was up only fractions of a percent and showing a dark candle confirming the downtrend that began in mid-August. If the market follows through on this signal the S&P 500 will retest the 3,500 level and possibly move even lower.

Tuesday was also marked by mixed economic data. The industrial production and capacity utilization figures came in better than expected but were offset by a new low in the home builders index. The NAHB home builders sentiment index hit 38 which is the lowest level since 2012. The gauge contracted on new traffic and the outlook for sales which hit 25 and 35 respectively. With this trend in place, the contraction in housing markets is gaining momentum and may drag the rest of the economy down with it.

Equity markets came out of the gate strong on Monday but the move may be short-lived. The rally peaked out below the prior week's high and the 3,700 resistance target despite better-than-expected results from many of the nation's largest banks. The move suggests upward momentum could build but there are headwinds to overcome. If the market can not get above 3,700 by the end of the week the odds of another sell-off in equities will grow. As it is, the downtrend is intact.

This week's market action will be driven by earnings and economic data. Reports from names like Netflix, JB Hunt, Abbot Laboratories, and Tractor Supply Company top the list. On the economic front, reports from the manufacturing and housing sectors will be accompanied by the Leading Indicators and the Fed's Beige Book. The first report of the week, the Philly Fed MBOS, was negative and much worse than expected so hope for good news may be misplaced.

Equities fell to a new low last week, rebounded strongly, hit resistance, and fell again to end the week down ahead of the first busy week of the Q3 earnings season. The move was driven by a hotter-than-expected CPI report that led to a technical bounce from key support. The takeaway is the market is unsure of what to make of the news although the downtrend is still intact. This week, investors should brace for another test of the 3,500 level, and if it is broken another 5% to 10% decline in the index.

Earnings reports will be front and center this week but so too will be the economic data. The data ranges from housing to manufacturing, to the Fed's Beige Book and the Index of Leading Indicators which is expected to be negative for the 6th consecutive month. The takeaway is the market downturn is not over and this week could bring renewed volatility.

Equity markets plunged on Thursday following hot inflation data. The September read of the Consumer Price Index came in hotter than expected at the headline and core levels as the cost of housing and wages continue to rise. The data seals the deal in regard to the Fed's next move which will be another 100 basis point interest rate hike according to the CMEs FedWatch Tool. If the next PCE Price Index reading is hot as well the FOMC could be forced to become even more aggressive. Technically speaking, the move hit a key support target at 3,500 which sparked a massive rebound that left the index up for the day.

Earnings season gets into high gear today with reports from the Big Banks. The banks are expected to show the benefit of rising interest rates but may scare the market if consumer and business banking results are weaker than expected. Rising interest rates help the spread upon which the banks make their money but also cut into economic activity.