Hi all,
CPI data came out Wednesday morning and showed a slight unexpected uptick in inflation. However, the PPI data that was released Thursday was a little lower. The net result was that traders now expect a ¼ to ½ percentage interest rate cut.
In fact, as of the weekend, the Fed watch tool has the odds at 50:50 for a small cut versus a bigger cut. I am very unsure how the market will react to one outcome versus the other. Will a ½ cut spook the markets (the Fed thinks things are worse than expected) or will the larger cut spur the markets to new highs? Will a ¼ point cut disappoint? We will have to wait and see.
The week prior, the market sold off hard on a weakening labor market and general concerns about the September effect. This led to the biggest one-week decline in the SPY for 2024. This last week we got the biggest one-week gain for the year – talk about volatility.
This Wednesday afternoon should be interesting with the rate decision, and then Fed chair Powell should speak at 2:30. Hold on to your hats.
Recap Video
Sectors in Play Last Week
Key Levels for this Week
What to Watch for this Week
Earnings this week
Positions and Trades Last Week
Tracking for Potential Trades
Wednesday is going to be very volatile, will probably lighten positions then sitting back and watch.
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