Stocks are marginally higher Friday morning following a rough tide over the last couple of sessions. Taken together, Wednesday and Thursday saw the S&P 500 index shed nearly 3.8% on heavy turnover. That is something to pay attention to; heavy selling means big institutions are distributing stock at a rapid pace.

When distribution is high it means the character of the market has changed from bullish to bearish. Indeed, we see moving averages in the short and medium term starting to move lower, so they now present themselves as overhead resistance. Markets are down 1% or more on the week so far and if today's early bounce gets sold it will be the second consecutive down week. We move into the last week of the month/quarter next week which could be pivotal in determining the direction for the remainder of the year.

The fallout from the Fed's decision on interest rates, projections and press conference was in clear view on Thursday. Not only were stocks down sharply but bonds and gold were also down along with bitcoin. It seems every asset class was risk off save for cash or money markets.

On the long end of the curve, interest rates rose sharply and reached levels not seen since 2006. Higher interest rates make it much more difficult to finance a business, buy a home or choose riskier assets for an investment.

On Thursday, 30-year mortgage rates rose to 7.75%, the highest since November 2000. These rates are up 500 basis points in just over three years. To see the impact, a $500,000 mortgage has gone from a $2,000/month payment to $3,600/month payment over that time.

McDonald's Raising Fees

Action Alerts PLUS holding McDonald's ( MCD) is raising royalty fees for new franchised restaurants for the first time in nearly 30 years. The change is being made amid the company's current acrimonious relationship with its U.S. franchisees. This likely means more fees to the bottom line for MCD.


It appears the U.K. regulator may clear the way for Microsoft ( MSFT) to take over Activision Blizzard ( ATVI) with its new offer. The company is offering to divest cloud rights for the Activision PC and console games and for new games published by Activision over the next 15 years to French game publisher Ubisoft before the sale is completed. Microsoft has been working very hard to complete this deal and now it seems to be in the homestretch.


Oil prices and gold are bouncing back Friday following a modest selloff Thursday. Supply issues and strong demand remain the issue for crude oil and gasoline, with crude looking to make a run towards $95 and then to $100 a barrel very soon. Elevated oil prices are contributing to overall high prices across the board, especially at the gas pump. Higher inflation is what the Fed is trying to fight with a very hawkish monetary policy.