CHRIS VERSACE: Good morning, Action Alerts PLUS members. Following the Fed's monetary policy meeting yesterday, after which it, as expected, boosted the Fed funds rate by 25-basis points, the stock market is looking to rebound today from yesterday's late day sell-off. Now, some are blaming that late day sell-off on comments made from Treasury Secretary Janet Yellen that the US is not currently working on, quote, "blank insurance for bank deposits".

To be fair, that is a bit of a rollback from what was reported earlier this week. And yes, as a result, we did see bank shares move lower along with the overall market. But as we look at the market opening up today, it appears to be shaking off some sobering comments from Fed Chair Powell that the Fed doesn't see any rate cuts coming in 2023. A quick glance at the CME FedWatch tool this morning shows a few rate cuts are still baked into the stock market cake for later this year.

Again, while some are chalking up yesterday's late day sell-off to Yellen's comments, the timing, we would point out, was very close to Powell's no rate cut comments. And in our view, it would be a big mistake to dismiss them. Powell also reiterated the Fed will continue to stay the course fighting inflation. And he also pointed out, as we have been doing with you, that recent inflation data is simply moving in the wrong direction.

Powell also chimed in that we do have a long path to the Fed's target rate of 2% ahead of us. And as you know, our thoughts were that this was the likely scenario to be had. So while the markets sold off yesterday, our inverse ETFs, along with the portfolio's cash position did their job. Now, we'll be looking to see whether the market is still sipping on "hopium," as we like to call it, expecting rate cuts later this year. Or, as we see in the next couple of days, if it turns around and starts to heed Powell's words. That means we will be revisiting the CME FedWatch tool as we close out the week.

Now, as we do that, what we will be doing is continuing to manage the portfolio and updating our thinking as fresh data is had in the coming days and weeks. One of the things we'll be looking to determine is the fallout of tighter credit that is going to occur as a result of recent bank failures. Now, we agree that we're in the early days of that and the magnitude in the very near term is going to be hard to measure. But as crazy as it sounds, we will soon be in the March quarter earnings season. And typically, banks lead off.

This means we'll get a much better and clearer picture of tighter credit and what the fallout is in the coming weeks. In the near term, however, tomorrow brings the March flash PMI data from S&P Global. And you know how we love to dig very deep into that. Once again, we will be eyeing what those reports have to say about new order activity and inflation, updating our thoughts about the market as we do so.

And it's no secret over the last several days that not only is the market got a little banged up, but we've also seen that with several portfolio positions as well. Earlier today, we added to our bank holdings in Bank of America. And as the market digests all of the comments it's had in the last 24 hours, we will be revisiting the shopping list that we've been sharing with you in the weekly roundups Anne touched on over the last several days in more recent daily rundowns.

Now, as we get ready to wrap, there is, of course, a lot more to be said about what the Fed did yesterday, the comments, the economic projections that they shared, and a whole lot more. So if you haven't yet checked out your Alerts, please do so. I shared my in-depth thoughts on the Fed policy statement and economic projections yesterday. And then in a weekly AAP podcast towards the end of the day, Bob Lang and I dissected everything Fed Chair Powell had to say.

Now, in terms of what's, next JD will be back tomorrow. And he'll be talking technical analysis with AAP team member Bruce Kamich. Thanks for watching.