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The President’s Day holiday kept the markets trading sideways early in the week, but once the FOMC meeting minutes indicated further rate hikes, markets once again turned bearish.

The lack of major economic data provided investors with ample time to keenly analyze the Federal Open Market Committee (FOMC) meeting minutes from January 31. Comments like “a stronger outlook for economic growth raised the likelihood that further gradual policy firming would be appropriate” prompted bears to start selling equities, ending last week’s short-lived recovery.

Moreover, the housing market continued to show signs of weakness as existing home sales dropped once again in January to 5.38 million, accelerating the bearish momentum later in the week.

While the Q4 earnings season started with lots of hope and we saw some good corporate earnings earlier in January, Walmart Inc. (WMT ) disappointed investors and missed its Q4 EPS estimate, further fueling the downturn.

Unless we see any political pressure building up to deter the Fed from hike rates in the coming months, in the short term, the upward trajectory in the equity markets will likely turn flat.

Be sure to check out our previous week’s edition here, in which market participants thought the short-term panic was over.

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