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Nothing/No One Matters More than This Woman Today

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Wednesday, March 15, 2017

There’s no getting around it: the FOMC meeting today has grabbed the baton and will orchestrate the markets both pre-announcement and post-. This is even though we see 3 key economic reads ahead of the bell this morning. And though each of them carry their own intrinsic interest, none of them are able to push the market in any direction. Everyone’s still waiting to hear from Janet Yellen.

Retail Sales headline was a boring +0.1% month over month, but we gained +0.2% on last month’s revision, which is to +0.6%. That’s a much meatier signal of growth in the retail space and evidence of inflation further creeping into the domestic economy. Ex-auto, the month over month read bumps up to 0.2%.

Last month’s read has an interesting wrinkle, however: it has spiked to double the last figure in its revision to +0.8%. So when you see a monthly gain of nearly 1% in retail, this is a clear signal that inflation is clear and present. The key is to look beneath headline numbers; good thing we’re experts at this here at Zacks Investment Research.

Also, we see a Consumer Price Index (CPI) number for February at +0.1%. Ex-food & energy, this number is +0.2%. Year over year illustrates upward momentum at 2.2%. And the March Empire State report shows a better-than-expected 16.4%, though this is lower than the February read of 18.7%, which is unrevised in today’s read.

However, none of this means anything right now. Some market participants are apparently holding out for a non-raise of 25 basis points on the Fed interest rate, because otherwise this should cause no one any pause. Markets have been pulling the foot off the gas for more than a week ahead of the understanding that the Fed would raise rates this afternoon, and these relatively healthy reads — following last week’s strength in new jobs, a key component to any Fed decision — do nothing to throw caution to anything the Fed decides today.

There are some Capitol Hill concerns these days that we’ve discussed here lately, and the basic gist is that the tax cuts and other governmental measures that could be beneficial to the stock market might be on pause longer than originally thought. Market futures are up today, however, indicating that perhaps those concerns are easily dealt with in the days, weeks and months ahead. Then again, this is why we track these things on a day-to-day basis.

Mark Vickery
Senior Editor

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