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Pre-Markets Up Ahead of FOMC, Housing Data and Jensen Huang
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Monday, March 18th, 2024
Pre-market futures are into the green (a day after St. Patrick’s Day) considerably at this hour, following a week of trading that was rather atypically erratic — at or near all-time highs one day, down to multi-week lows another, finishing down to the second-worst trading week of the year. Currently, the Dow is +98 points, the S&P 500 is +43 and the Nasdaq +226 points. Apparently, market participants are expecting good things for the tech sector this week.
The biggest news we expect is a new report from the Federal Open Market Committee (FOMC), beginning Tuesday and finishing up Wednesday — after which we will head from Fed Chair Jerome Powell at a press conference. No one is expecting the Fed to move from its current 5.25-5.50% interest rate level, but we do expect a new “dot-plot,” which will be used as a sort of road map for potential cuts throughout the remainder of 2024. Currently, the first rate cut is expected at the June meeting, which is two meetings from now.
Bond yields are up on both the 2-year and 10-year — 4.726% and 4.320%, respectively — keeping the roughly 40-basis-point (bps) inversion, where we’ve been for most of the past couple years. These days, the inversion itself is not the big story (even though yield-curve inversions do tend to pre-date recessions, lest we forget), it’s the rate of change on both. Previously, with expectations of Fed rate cuts coming as soon as this week’s meeting (which they won’t), bind yields had been recessing notably — certainly from the 5% range, which correlated with the last time a bear market had taken hold of equities (last fall).
Aside from the FOMC meeting, we get some housing data this week: the Homebuilder Confidence Survey for February after the opening bell today, Housing Starts and Building Permits tomorrow, and Existing Home Dales for February on Thursday. In the grand scheme of things, it’s not a hugely consequential week for economic data, but every little drib and drab helps us prepare for the immediate future.
Also, although Q4 earnings season has been exhausted — and once again better than expected, overall, which has helped markets progress thus far year to date (last week notwithstanding), we do see some companies reporting this week of some note: FedEx (FDX - Free Report) — not only a major transportation and logistics firm, but a gauge on global consumption; it’s our first look at Q1 consumer appetite — NIKE (NKE - Free Report) and Micron (MU - Free Report) . The Q1 earnings season doesn’t really ramp up for another four weeks.
Later today, NVIDIA (NVDA - Free Report) co-founder and CEO Jensen Huang will deliver a keynote address on A.I. technology at this year’s GTC summit (GTC stands for GPU [which stands for Graphics Processing Unit, used in everything from crypto to video games] Technology Conference) in San Jose, CA. Huang is one of the most important innovators of this century, so when he offers his views on artificial intelligence, it will be of high importance for investors, particularly those in the tech space.
Image: Bigstock
Pre-Markets Up Ahead of FOMC, Housing Data and Jensen Huang
Monday, March 18th, 2024
Pre-market futures are into the green (a day after St. Patrick’s Day) considerably at this hour, following a week of trading that was rather atypically erratic — at or near all-time highs one day, down to multi-week lows another, finishing down to the second-worst trading week of the year. Currently, the Dow is +98 points, the S&P 500 is +43 and the Nasdaq +226 points. Apparently, market participants are expecting good things for the tech sector this week.
The biggest news we expect is a new report from the Federal Open Market Committee (FOMC), beginning Tuesday and finishing up Wednesday — after which we will head from Fed Chair Jerome Powell at a press conference. No one is expecting the Fed to move from its current 5.25-5.50% interest rate level, but we do expect a new “dot-plot,” which will be used as a sort of road map for potential cuts throughout the remainder of 2024. Currently, the first rate cut is expected at the June meeting, which is two meetings from now.
Bond yields are up on both the 2-year and 10-year — 4.726% and 4.320%, respectively — keeping the roughly 40-basis-point (bps) inversion, where we’ve been for most of the past couple years. These days, the inversion itself is not the big story (even though yield-curve inversions do tend to pre-date recessions, lest we forget), it’s the rate of change on both. Previously, with expectations of Fed rate cuts coming as soon as this week’s meeting (which they won’t), bind yields had been recessing notably — certainly from the 5% range, which correlated with the last time a bear market had taken hold of equities (last fall).
Aside from the FOMC meeting, we get some housing data this week: the Homebuilder Confidence Survey for February after the opening bell today, Housing Starts and Building Permits tomorrow, and Existing Home Dales for February on Thursday. In the grand scheme of things, it’s not a hugely consequential week for economic data, but every little drib and drab helps us prepare for the immediate future.
Also, although Q4 earnings season has been exhausted — and once again better than expected, overall, which has helped markets progress thus far year to date (last week notwithstanding), we do see some companies reporting this week of some note: FedEx (FDX - Free Report) — not only a major transportation and logistics firm, but a gauge on global consumption; it’s our first look at Q1 consumer appetite — NIKE (NKE - Free Report) and Micron (MU - Free Report) . The Q1 earnings season doesn’t really ramp up for another four weeks.
Later today, NVIDIA (NVDA - Free Report) co-founder and CEO Jensen Huang will deliver a keynote address on A.I. technology at this year’s GTC summit (GTC stands for GPU [which stands for Graphics Processing Unit, used in everything from crypto to video games] Technology Conference) in San Jose, CA. Huang is one of the most important innovators of this century, so when he offers his views on artificial intelligence, it will be of high importance for investors, particularly those in the tech space.
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