Julien Ponthus takes a look at the days ahead.

Investors may not be surprised to see the Nasdaq closing under the 200-day moving median, despite all the chaos in financial markets yesterday.

Dumping high-quality tech stocks and growth stock when the Federal Reserve begins an interest rate hike cycle can be considered basic stock market trading 101.

Another common mistake is to be too heavy on banks stocks in order to tighten monetary policy. However, that trade backfired horribly when Goldman Sachs (NYSE) failed quarterly profit estimates and plummeted 7% due rising expenses.

Bofa and traders are currently in wait Morgan Stanley (NYSE:) To update the market, today, and to see if the main theme of the new earnings season may just be increasing costs including the impact on profits in all sectors, visit www.NYSE.com.

It’s safe to say that there is a lot of uncertainty in the stock markets, with U.S. and European futures falling more than 0.5%. However, other structural forces associated with this tightening cycle have only begun to gain strength as of early 2022.

As the Federal Reserve makes signs it is more aggressive in fighting inflation, the dollar has been pushed up against other currencies. Benchmark U.S. Treasury yields are trading at their highest levels in two years. Germany’s 10-year bond yield climbed above 0% in Europe for the first time since May 2019.

The latest British data shows that the consumer price index rose by 5.4% to December. This is the highest level since March 1992. It might be a signal to Bank of England to increase tightening.

Investors were warned by the prudent Bank of Japan that inflation could accelerate sooner than anticipated if raw materials costs keep rising.

The increase in oil prices came at a time when they are higher than levels seen since 2014. This was due to concerns over tight supplies and an outage of a pipe connecting Iraq and Turkey.

Graphic: Bund, https://fingfx.thomsonreuters.com/gfx/mkt/gdpzykgqwvw/Pasted%20image%201642577918037.png

On Wednesday, key developments should give more direction to the markets:

Inflation rises in UK to the highest point for almost 30 years

German Harmonized inflation +5.7% in December

US Housing Starts

US 20-year Treasury Auction

Earnings in the USA: Bofa State Street (NYSE: ) Morgan Stanley Proctor and Gamble Bancorp Alcoa (NYSE:)

BoE Governor Bailey and the Deputy Governor Cunliffe talk about Central Banks

Fritz Zurbrugg (Vice Chair of Swiss National Bank), speaks.