(Monday Pre-Market) Powell and company ride again this coming week.
The Fed takes the spotlight Tuesday and Wednesday in a meeting that investors widely expect to result in another rate hike, the third of the year. Fed Chair Jerome Powell has made it clear he believes the Fed should continue gradually raising borrowing costs, and the futures market appears to buy what he’s selling. As of Friday, CME futures placed rate increase odds at around 94%.
Since the Fed usually does such a good job readying investors for a hike, the question is more around what might emerge from the post-meeting release and Powell’s Wednesday press conference. Investors are likely to be on the edge of their seats waiting to hear Powell’s views on inflation and wage growth, and what he says could help shape expectations for future rate moves not just in 2018, but increasingly looking into 2019 as well. In one signal of expectations ahead of the meeting, 10-year Treasury yields rose to 3.07% as of midday Friday after a solid rally from levels down near 2.8% a month ago.
The Fed has been raising rates pretty regularly since late 2015, and if it does so again
Markets start the day coming off of record highs for the $DJI and SPX on Thursday. There’s not much in the way of earnings or data news Friday.
With the fear over trade between the United State and China seeming to have lessened, that leaves market participants to focus on a U.S. economy that is apparently healthy, inflation that isn’t troublesome and corporate earnings that by and large have been solid.
Investors appear poised to continue digesting the latest headlines concerning trade tensions between Washington and Beijing as Canada and the United States continue trade talks.
The main focus once again seems to be tariffs on China, but earnings late yesterday are also being digested as two major U.S. companies reported.
The market seems stuck between embracing risk and stepping more cautiously as trade winds continue to blow. There’s not a lot of data or earnings to look at in the days ahead.
The cautious optimism that helped lift stocks Thursday appears to be intact after strength in overseas markets early Friday.
The market appears a bit more optimistic this morning amid news that U.S. and China might meet again to discuss trade and after the government issued a benign reading on consumer prices.
Anticipation appears to be the sentiment this morning as investors seem to look toward Apple’s event and commentary from central banks.
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