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Ahead Of The FOMC Meeting

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Today’s calendar holds the latest Federal Open Market Committee (FOMC) meeting in New York this morning, where the Fed will decide to bring a third quarter-point hike to its benchmark interest rate. The new range as of this official announcement tomorrow will be 2.00-2.25%, the highest we’ve seen since prior to the Great Recession.

Historically speaking, a 2% rate is still quite low; the Fed is very interested in building up a buffer for future cyclical economic downturns without stifling growth by raising rates too high too fast. Fed Chair Jerome Powell seems to be in possession of former Fed Chair Janet Yellen’s playbook (which was passed to her, largely, by her predecessor, Ben Bernanke), and investors appear to be overall quite comfortable with the pace. Tomorrow’s rate rise in a veritable certainty, and market indexes trading up near all-time highs is all the proof we need that market participants are not bothered by the Fed’s actions.

We see some slowing down in housing rates, and jobs numbers — while stellar in every comparative metric — have begun to slow the pace of growth in an uncommonly tightened workforce. Near-term, challenges related to the flood and damage recovery from Hurricane Florence in the coastal Carolinas, and longer-term fallout from myriad trade-deal static in the U.S. look to be the only reasonable headwinds on the horizon. Thus, we don’t see any reason at all for the Fed to tack a different course.

After the market opens today, we’ll see “new” Case-Shiller housing numbers from July; the comprehensive study showed growth of 6.2% in last month’s read. We also expect September Consumer Confidence numbers, which are expected to remain steady at just over 133.

Instagram Co-Founders Leaving Facebook

Prior to this morning’s open, the biggest story is that the co-founders of Instagram are reportedly leaving Facebook (FB - Free Report) , which had acquired the social media platform back in 2012. Kevin Systrom and Mike Krieger, whose Instagram company has provided the growth engine for Facebook of late — especially following the exodus from Facebook in the wake of data fraud and manipulation which has dogged Facebook since the 2016 General Election — have chosen to leave the company. Instagram currently has over 1 billion users on its own.

Reports are that Facebook CEO Mark Zuckerberg has been taking a growing interest in the day-to-day operations at Instagram, and it would stand to reason that this has at least partly generated the conflict between the parties. No specifics have yet been given as to the exact explanation why the co-founders are leaving the parent company. Facebook shares are currently down about 2.3% in the pre-market, and are roughly flat over the past year.

Even before this big news began the day for us, Facebook was already listed as today’s Bear of the Day. Click here for more.

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