September 19, 2023 | Daily JAM, Mid Term, Special Reports |
In this Special Report I’m going to start by sorting out the data that the market’s moves will likely depend on for the rest of 2023. That’s today’s post, Part 1 of this Special Report. Then I’ll try to handicap the likelihood that the data will zig or zag. And give you a sense of how far away from the current consensus the actual result might fall. And then finally, I’ll give you 10 moves for the rest of 2023 that are the most likely, in my opinion, to result in profits and that won’t wind up costing you big if the data winds up throwing investors a curve.
September 18, 2023 | Daily JAM, Morning Briefing, Short Term |
Here’s my cheat sheet of what to watch for in Wednesday’s Dot Plot revision of the Federal Reserve’s forecasts for the rest of 2023 and 2024. The last revisions before this came at the Fed’s June meeting so there’s reason to think that the Fed will have something market-moving to say about how it sees the economy, interest rates, inflation, and unemployment trending over the next year and a half.
September 16, 2023 | Daily JAM, Short Term |
Watch what the Federal Reserve says on Wednesday not what it does at the interest-rate setting meeting of the Open Market Committee. Everybody, I mean everybody, expects that the Fed will hold its benchmark interest rate steady at the current range of 5.25% to 5.50%. The odds, calculated from prices in the Fed Funds Futures market by the CME FedWatch Tool, stand at 98% that the central bank will do nothing. But this meeting also includes an update of the Fed’s Dot Plot forecast for future interest rates, inflation, unemployment and GDP growth. And those numbers will give investors the best available clue on what the Fed will do at its November meeting and int 2024.
September 13, 2023 | Daily JAM, Mid Term, Morning Briefing |
The theory, for today at least, is that the uptick in CPI inflation for August doesn’t change the basis calculus at the Federal Reserve.
September 6, 2023 | Daily JAM, Morning Briefing, Short Term |
U.S. stocks fell today, Wednesday, on a stronger-than-expected, Purchasing Managers Index (PMI) for the service sector. The reading raised fears that the Federal Reserve, which is generally expected to keep interest rates steady at its September 20 meeting, will not move quickly to reduce rates. The odds of an interest rate INCREASE at the Fed’s November 1 meeting rose to 47.2% on the CME FedWatch Tool from 42% yesterday.
August 19, 2023 | Daily JAM, Short Term |
A nervous global financial market will hope that Federal Reserve chair Jerome Powell’s Friday talk at the annual Jackson Hole conference hosted by the Kansas City Fed will add clarity after the Fed’s minutes of its July policy meeting that showed most Fed officials saw significant upside risk to inflation.
August 8, 2023 | Daily JAM, Morning Briefing |
There’s a good chance that the Thursday morning CPI inflation report for July will show a small step backwards in the Fed’s battle against inflation. Here’s the Wall Street consensus as of the end of last week according to FactSet.
July 26, 2023 | Daily JAM, Morning Briefing |
The Federal Reserve raised its benchmark short-term interest rate 25 basis points to 5.25% to 5.50%. The central bank said that further interest rates are likely, but that the timing of any rate increases was contingent on data showing how the economy is reacting to interest rate increases so far. Fed Chair Jerome Powell made it clear that there is more work ahead to bring in inflation down to the Fed’s target of 2%. But he also made it clear that the timing of any future moves will depend on of data over the coming weeks and months. “We think we need to stay on task,” Powell said
July 24, 2023 | Daily JAM, Morning Briefing |
Ho, hum, it’s a quiet week with nothing much going on. Oh, except for the meeting the Federal Reserve’s interest-rate setting Open Market Committee on Wednesday, July 26. Oh, and earnings from Microsoft (MSFT) and Alphabet (GOOG) on July 25, and Meta Platform (META aka Facebook) on July 26. Apple (AAPL) and Amazon (AMZN report on August 3.
July 13, 2023 | Daily JAM, Videos |
Today’s video is Remember the Quiet Period. Don’t panic. There have been a lot of announcements coming from the Fed recently but it’s not because there’s a new crisis or a huge event brewing. It’s simply that the window of time when the Fed can speak is about to close. The Fed has to go quiet twelve days before the July meeting, so right now, they’re trying to make it very clear to the market that a 25 basis point raise is likely in July. On Monday, three Fed officials, Michael Barr, Mary Daly and Loretta Mester discussed the need for another rate hike–possibly two. We’ll be entering the Fed’s quiet period on Saturday, July 15. Looking at the CME FedWatch, on July 11, the market believed there was a 92.4% chance we’ll get a rate hike on July 26. On the same date, the market thought the odds were only at 22.2% for a 25 basis point increase at the meeting on September 20. It sounds like the Fed has made their intentions clear for the July 26 meeting, and the market won’t be shocked by a rate hike on that date. September 20? Hmmm.
July 13, 2023 | Daily JAM, Morning Briefing |
Yesterday, the Bureau of Labor Statistics reported that all-items inflation rose at just a 3% annual rate in June. That was a huge drop from the 4% annual rate reported in May. The inflation numbers immediately prompted Wall Street to, again, declare that the Federal Reserve’s cycle of interest rate increases would end “soon.” “Soon” is now defined as after the Fed’s July 26 meeting. Fed officials have been so adamant in recent days about the need for more interest rate increases that the odds of 25 basis point increase at the July 26 meeting barely budged after the June CPI report. Today the CME FedWatch Took, which calculates the odds of a Fed move by looking at prices in the Fed Funds Futures market (and is, thus, a measure of investor sentiment rather than speculation on Fed thinking) puts the odds of a July 26 25 basis point increase at 92.4%. That’s down only slightly from the 94.2% odds before the CPI inflation report. The big move has been in the odds for a second 25 basis point increase at the Fed’s September 20 meeting. Today, the odds are just 11.1%. That’s down from 13.2% odds of a 25 basis point move in September on July 12. And down big from 27.5% odds of another interest rate increase in September on July 6. And there’s the Fed’s problem.
July 9, 2023 | Daily JAM, Morning Briefing |
Look for big news on inflation and earnings this week. But I think the news is baked into stock prices so I don’t expect much of a move on the news.
