Our general investment approach remains the same as depicted in last week’s commentary. We maintain our preference for big cap quality stocks with good balance sheets, relatively stable cash flows and stable margins. Volatility across sectors continues to be supportive of a diversified portfolio for long term investors. We expect volatility across virtually all financial markets to continue.

After Powell’s remarks this week, we expect the Fed to be more data dependent and more forward looking. All other things being equal, this should reduce the chances of the Fed “over-tightening.” But given the Fed’s forecasting record, we remain uncertain.

We believe that this week’s trading and movements in financial markets confirms that interest rates and their volatility continue to be the principal drivers of equities and currencies. The importance of downwardly revised earnings and margins that we have been anticipating have been prominently on display this week as well. The muted spillover effects from negative “surprises” from even some of the largest MegacapTech stocks has been an encouraging sign for the overall U.S. equity markets. Everything else being equal, seasonal factors could be very conducive for favorable U.S. stock performance in the near term.

Our general investment approach remains the same as depicted in last week’s commentary. We maintain our preference for big cap high quality stocks with good balance sheets, relatively stable cash flows and stable margins. Volatility across sectors continues to be supportive of a diversified portfolio for long term investors.