FOMC week ahead! + Levels for Sept. 19th 2023
Posted By:- Ilan Levy-Mayer Vice President, Cannon Trading Futures Blog
The Week Ahead: FED Talk
By John Thorpe, Senior Broker
1st of the final 3 Fed meetings this year happens this week.
The 1st upcoming meeting on Wednesday the 20th and the final Fed meeting December 13th will also include as a component “Projection Materials” or “Summary of Economic Projections”. The Summary of economic projections should give us a better view of what the voting Fed members are seeing as well. They represent more data driven insights than merely the commentary that follows the rate decisions.
Again, the language of Wednesday’s commentary will be more heavily based on data dependency as investors look for language alluding to the end of the rate increase cycle.
The Oct31/Nov 1 Fed (this is the 2nd of 3 remaining this Year) meeting will not include this data but will still include Fed Chair Powell’s commentary.
Why focus on fed meetings? There is Clear correlation between expectations of interest rate changes and Equity Market prices. An overly simplistic description: Interest rates go higher, equity prices go lower and the correlative inverse should also follow that when interest rates go lower, equity prices go higher.
Clearly our equity indices are range bound as the market has been discounting any and all further rate increases the Fed has alluded to. What has been supporting the market is the view that rate tightening is nearing an end. The Summary of economic projections should give us a better view of what the voting Fed members are seeing as well.
CME Fedwatch Tool is reflecting a 99% probability of no rate change this meeting, maintaining the 5.25-5.50 current borrowing rate with a 1 % chance of a raise in rates.
Earnings
Fedex (FDX) headlines a relatively light earnings calendar this week, with the logistics giant slated to disclose its fiscal first-quarter results after Wednesday’s close. Analysts, on average, expect the company to report earnings of $3.73 per share, up 8.4% year-over-year (YoY), on revenue of $21.8 billion (-7.6% YoY).
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Futures Trading Levels
09-19-2023
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