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<h2>In this week’s economic reports, the hotter-than-expected Consumer Price Index (CPI) release led to the worst daily performance for the S&amp;P 500 in over two years.</h2>
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<p>The S&amp;P 500 traded sharply lower this week as investors realize that the Federal Reserve has a lot more work to do in their fight to contain inflation.&nbsp;</p>
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<p>In this week’s economic reports, the hotter-than-expected Consumer Price Index (CPI) release led to the worst daily performance for the S&amp;P 500 in over two years.&nbsp; It also caused some speculation that the Federal Reserve may hike rates by a full percent at next week’s FOMC meeting. Also, both NFIB Small Business Optimism and Consumer Sentiment rebounded modestly this week, yet both remain at levels historically associated with recession. Finally, economic fears have been further heightened following FedEx’s dismal results citing international weakness, and the CEO’s expectation that we are headed for a worldwide recession.</p>
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<p>On the technical front, another factor that drove the S&amp;P 500 to its largest daily loss in over two years was the fact that our short-term Pressure Factor reached its most overbought reading of the past decade (+84) just the day before. For more information on how the Pressure Factor has proven to be an invaluable tool during this bear market, see this month’s issue of <em>InvesTech Research </em>(available later today on our website). The technical situation remains weak on a longer-term basis as well, most notably with our Housing [Bubble] Bellwether Barometer dropping below its next support level as 30-year mortgage rates surpassed 6% for the first time since 2008.</p>
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<h3>There are no changes to the Model Fund Portfolio this week, which remains defensively positioned with a net invested allocation of 44%.</h3>
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