Analyzing Who Has the Greatest Potential to Move Markets

Review the latest Weekly Headings by CIO Larry Adam.

Key Takeaways

  • The Fed’s tightening cycle is coming to an end
  • Concerns about the debt ceiling impasse are rising
  • Mega-cap earnings will be key to watch

Pro football’s long-awaited draft is here! This year’s 88th annual draft takes place in Kansas City (home of the reigning champs), where the 32 franchise teams get a chance to fortify their rosters. To level the playing field and ensure that all franchises have a competitive edge, the league grants the team with the worst record in last year’s regular season the top pick among the most elite college football athletes across the nation. The reigning championship team is awarded the final selection of each of the seven rounds of the draft. To add to the excitement, teams trade their draft picks to rebuild their rosters or put their franchise in a better position to acquire specific skill sets that need to be filled. In the spirit of the draft, we present our own top five picks for 2023 and their potential to move markets:

Jerome Powell | With the first pick of the draft, we select Federal Reserve Chairman Jerome Powell, who has an unparalleled sphere of influence on financial markets worldwide. When Powell speaks, the world listens. His words and actions have the power to move markets significantly – in either direction. And with the Fed expected to deliver another 25 basis point rate hike at the May 2-3 meeting next week, Powell’s press conference has the potential to be a pivotal event for the market. We expect him to insinuate that the Fed will potentially pause after this rate hike to assess the lagged economic impact of the aggressive tightening to date and to monitor credit conditions in the wake of the recent banking sector stress. Despite market expectations for rate cuts on the horizon, we do not expect the Fed to cut rates in 2023, especially with inflation still above its 2.0% target.