Regarding the “Emergency Fed Meeting”, I’ll just say that this is not out of the ordinary and these have been schedule and held previously before and I don’t believe the meeting minutes are released:
Federal Reserve Board - Board Meetings (see 1/18 for another meeting with the same topic).
Although Jan 18th had a red day overall, it was in that general downward trend for SPY that week.
I also think that Bullard isn’t going to be as much as a bear catalyst as last time - although he’s on Squawkbox at 8:30a (before the meeting) he’s already said his piece, but he is the only Fed official who endorses a 50-basis-point hike - every other Fed President has countered this, I think JPow has been mum but Bullard is notoriously hawkish and isn’t afraid to say so. It’s possible the markets could dip lower on Bullard’s comments but he’s already said his piece at this point.
So given Fed meeting won’t release minutes, these happen fairly often, and no other Fed official has agreed with Bullard on the 0.5% hike, I don’t see Monday actually have a ton of bear catalysts short of Russia actually invading Ukraine, which is a white hot wildcard here. I know inflation is a concern, but the CPI data was released premarket Thursday and SPY actually rallied from the dip until Bullard’s comments. Also important to note is core inflation is 6.0%, which is above the expectation of 5.9% but not much. I personally think the markets are heavily overreacting at the moment to possible hawkish Fed action.
The final interesting piece to this week is the PPI - the producer price index. I don’t know if this necessarily will be coming in above expectations and if it comes in under it could be a bull catalyst. Two major reasons: EPS/earnings/profit has been on the rise in ER in addition to revenue beats, and although wages & costs have been on the rise which has transitioned into a higher retail price (CPI), from my understanding the prices factored into the PPI are from domestic industries of raw goods and services (no imports). Since this is a leading indicator, if supply chain were affecting these industries initially and driving scarcity up initially (PPI was high for most of 2021), resolution of supply chain could cause this to start dropping, which would then cause CPI to start dropping.
Indeed, over the past 5 months (since Sept), PPI had been decreasing a bit from mid 2021 until November, possibly due to Omicron, but in December PPI dropped dramatically. This, then, may be realized into increasing profits for companies in the Q4 cycle and recent ERs (when PPI was dropping but wages were increasing due to labor shortages).
This may be a chicken or egg argument but if inflation is more affected by supply chain issues, a decreasing PPI over time will be a leading indicator that inflation may have a transitory component - the importance of this, then, would be Fed policy would be less hawkish than what Bullard thinks is necessary.
So my thoughts are absent a Russian invasion, and maybe even after a Russian invasion, signals that inflation is not progressing as dramatically as the markets think would actually catalyze a market rally/recovery. This week may be really choppy for SPY though, war concerns + a lot of reports/news, including jobs data - which has been coming in stronger than anticipated as well: https://www.cnbc.com/2022/02/11/fed-rate-debate-ukraine-tensions-could-jolt-markets-in-the-week-ahead.html