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Question of the Week

Can the Fed engineer a soft landing?
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Morning Commentary

Waiting on the Fed

By Charles Payne, CEO & Principal Analyst
5/2/2022 9:45 AM

It was another nasty Friday session that starts investors off on edge – heck I peeked at equity futures at 4am this morning bracing for anything.  This is the point on the chart where would-be buyers get to step up.   The S&P 500 at a double bottom. 


Widespread Carnage

Nowhere to go nowhere to hide.

S&P 500 Map

How brutal was Friday? Only once has the last trading day of a month been this damaging.

Today’s Session

Sell in May?

I do not subscribe to the old notion of selling in May and coming back in November, although, it would be lovely if the market worked that way.  Instead, it’s normally higher during the May – October period with different variations.


It’s all about gaming the Federal Reserve, which means the market has dismissed a ton of great individual news from earnings season and investors are overreacting on some hedges.

With that in mind, the way this market has been acting, it’s clear cash is king for the moment.

Portfolio Approach

There are no sector weighting changes this morning in our Hotline Model Portfolio.

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What does a senior do but stay the course? Inflation makes the losses worse. Allocation takes on an especially significant role, as always. Thank you, Charles, for your honest analysis.

Robert D Blocker on 5/2/2022 10:16:47 AM
Can Pigs Fly?

Charles Haselberger on 5/2/2022 10:30:59 AM
I like that you pointed out the double bottom. I had not noticed it, myself. Shame on me! Thank You!

Charles Haselberger on 5/2/2022 10:34:28 AM
I would surmise as soft as conditions permit. The Fed res. is not trying to mess us up. I'm sure they would love to say see all this was temporary and we fixed it. That's not always possible. The Total Stk Market has been up 30% each of the last years. Remember that the market always has revert to the MEAN. It won't go up 30% every year and the mean since 29 is around 8 to 9 %. There's a lot of funny money in the market, but it will come back. When, only God knows. Charles you deserve an Eagle Scout badge for always being there for us. God bless.

Lorin on 5/2/2022 11:40:59 AM
They havenít been very good at it at in the past. Mathematically the odds are against it.

Terry on 5/2/2022 12:32:47 PM
I don't see how since inflation is in part driven by energy prices and we aren't allowed to drill. You could raise rates 'till the cows come home and inflation would still be rising. This seems to leave us in the cure for high prices IS high prices position. So NO!!

Darrell on 5/4/2022 12:41:57 AM
I think the elephant in the room is what happens with existing and future tax code for individuals and business.

Paul on 5/6/2022 10:09:23 AM
In a word, No, and I'd like to add another question into the mix coming from the bread basket of the world... how will the food shortage, possible world-wide famine effect the market? Because of drought, reduced amounts of wheat in TX, OK, possibly KS and of course the war in Ukraine, where's the bread gonna come from?

Jim C on 5/6/2022 12:50:29 PM
The fed would only be a part of the soft landing. It would take several factors. But for now it's looking like a hard landing.

Donna Delbene on 5/21/2022 10:57:22 AM
Only if the Fed works in concert with the Fed Gov. They created the inflation together they have to reverse it together.

What the Fed Gov has to do is to reverse the regulations on energy sector. If the oil price goes under $80 per barrel the inflation goes lower, and the war in Ukraine ends because Russia cannot pay its bills. Russia needs the oil at $80.

What the Fed has to do is to continue with rates increase of 50 basis points in June, reserve the balance sheet reduction from $95B to $30B per month.

As I said, they have to do it in concert starting this Monday.

Ellen N on 5/22/2022 6:24:27 PM

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