Week of 02/13-02/17 Inflation keeps Wall Street worried

Volatile week ended on Friday as markets fall over the three day weekend. Inflations fears arise as the latest January producer price index (PPI) report indicates that has increased 0.7% month over month, which is greater than economists expectations of 0.4%. The SPY has now entered a downtrend over its previous resistance and headed down to the 400-point level. After that, we have another resistance in the chart at 392-point but it would mean a heavy downturn for major stocks. With the CPI report also fueling the downside momentum, there are also worries that the federal reserve may continue the rate hikes in the next coming months. Stock market rallied earlier this month on the news of a lower rate hike and potentially a halt on raising interest rates. That idea seems to be fading as the market price action indicates more uncertainty for 2023. A soft lading would be ideal, but we are going to have to pay close attention on what happens from now until Powell speaks again during the next FOMC on March21-22.