Stocks Down As Inflation Concerns Weigh  Image: Bigstock Stocks closed lower yesterday with all of the indices in the red. Inflation continues to be one of the chief concerns of the market. Same with the war on Ukraine. That's sent already high oil and gas prices even higher. Same for coal. It's also disrupted the supply chain for agricultural products (grains and fertilizer), as both Russia and Ukraine are key exporters. As inflation rages, the focus has shifted to how much will the Fed raise rates at the conclusion of their next FOMC meeting on May 4th. Some worry that if they raise rates by 50 basis points, it could slow the economy too much. But a slowing economy has not been the issue. The issue has been that it might just be too strong, or at the very least, an economy with just too much accommodation. And while some worry of going too big (nobody is seriously looking for more than 50 basis points), others believe the real worry is not going big enough (only raising by 25 basis points), and allowing inflation to fester even more, given that the Fed let it stay too hot for too long in the first place. In other news, yesterday's PMI Composite report saw the Composite Index come in at 57.7 vs. views for 58.5. The Services Index came in at 58.0 vs. the consensus for 58.9. The ISM Services Index came in at 58.3, just missing last month's 58.5 and views for the same. Today we'll get MBA Mortgage Applications, the EIA Petroleum Status Report, and the FOMC Minutes from last month's report. And we'll get more earnings with 19 companies set to report today (38 total between today and the end of the week). Next week there's 78 on deck. And then 279 the week after that. In the meantime, we'll see if stocks can regroup and build on previous gains, especially since stocks typically go up during earnings season. See you tomorrow,  Kevin Matras
Executive Vice President, Zacks Investment Research | 
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