Good Evening:

This was another dramatic and volatile week in markets. A higher-than-expected inflation reading on Wednesday spooked markets a bit, but an even bigger sell-off occurred on Thursday when the S&P 500 briefly dipped to lows below 3,860. Today, markets recovered with a strong rally that brough the VIX back below $30. At one point the index was up above 4,030 but the rally steadily faded in the afternoon as the herky-jerky May markets continued to process multiple risks and the advent of a tightening cycle with what is looking like an anachronistically tough Federal Reserve hell-bent on bringing inflation down toward their 2% target. This is certainly not what they had in mind when they introduced Adjustable Inflation Targeting.

Earnings continued to be a mixed picture and in this hair-trigger market it seems that guidance and the general malaise amongst investors is carrying the day against fundamentals. Disney, for example, had a report that was strong in many ways but sold off. Fear rather than greed appears to be driving the bus these days.

Trading sessions have been volatile. If you don’t like the market’s direction than wait five minutes. Despite the increasingly common intraday swings from red to green and back again, the VIX is not showing the ...

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