ES levels July 27 , 2023
Today's trade was mixed as market participants reacted to a heavy batch of earnings, the latest policy move by the FOMC, and Fed Chair Powell's subsequent commentary.
The FOMC voted unanimously to raise the target range for the fed funds rate by 25 basis points to 5.25-5.50%, as expected. The policy directive also upgraded the description of economic activity to expanding at a moderate pace from continuing to expand at a modest pace in the June directive.
The market reaction was relatively muted as investors looked ahead to Fed Chair Powell's press conference, which induced some whipsaw price action for the major indices.
Mr. Powell acknowledged that inflation has moderated somewhat since the middle of last year. Nonetheless, the process of getting inflation back down to two percent has a long way to go. The Fed currently doesn't see inflation getting down to two percent until 2025 or so. The Fed will continue to make its decisions meeting by meeting. The idea, though, that the Fed would keep hiking until inflation gets to two percent would be a prescription of going way past the target and that's clearly not the appropriate way to think about it.
Econ Data (Thursday):
8:30 ET: Advance Q2 GDP (Briefing.com consensus 1.6%; prior 2.0%), advance Q2 GDP Deflator (Briefing.com consensus 3.0%; prior 4.1%), Weekly Initial Claims (Briefing.com consensus 233,000; prior 228,000), Continuing Claims (prior 1.754 mln), June Durable Orders (Briefing.com consensus 1.0%; prior 1.7%), Durable Orders ex-transportation (Briefing.com consensus 0.2%; prior 0.6%), June advance goods trade deficit (-$91.1 bln), June advance Retail Inventories (prior 0.8%), and June advance Wholesale Inventories (prior -0.1%)
10:00 ET: June Pending Home Sales (Briefing.com consensus 0.3%; prior -2.7%)
10:30 ET: Weekly natural gas inventories (prior +41 bcf)
Fair Value for Thursday, July 27:
S&P 500: 4,594
Nasdaq 100: 15,604
DJIA: 35,672
Today's trade was mixed as market participants reacted to a heavy batch of earnings, the latest policy move by the FOMC, and Fed Chair Powell's subsequent commentary.
The FOMC voted unanimously to raise the target range for the fed funds rate by 25 basis points to 5.25-5.50%, as expected. The policy directive also upgraded the description of economic activity to expanding at a moderate pace from continuing to expand at a modest pace in the June directive.
The market reaction was relatively muted as investors looked ahead to Fed Chair Powell's press conference, which induced some whipsaw price action for the major indices.
Mr. Powell acknowledged that inflation has moderated somewhat since the middle of last year. Nonetheless, the process of getting inflation back down to two percent has a long way to go. The Fed currently doesn't see inflation getting down to two percent until 2025 or so. The Fed will continue to make its decisions meeting by meeting. The idea, though, that the Fed would keep hiking until inflation gets to two percent would be a prescription of going way past the target and that's clearly not the appropriate way to think about it.
Econ Data (Thursday):
8:30 ET: Advance Q2 GDP (Briefing.com consensus 1.6%; prior 2.0%), advance Q2 GDP Deflator (Briefing.com consensus 3.0%; prior 4.1%), Weekly Initial Claims (Briefing.com consensus 233,000; prior 228,000), Continuing Claims (prior 1.754 mln), June Durable Orders (Briefing.com consensus 1.0%; prior 1.7%), Durable Orders ex-transportation (Briefing.com consensus 0.2%; prior 0.6%), June advance goods trade deficit (-$91.1 bln), June advance Retail Inventories (prior 0.8%), and June advance Wholesale Inventories (prior -0.1%)
10:00 ET: June Pending Home Sales (Briefing.com consensus 0.3%; prior -2.7%)
10:30 ET: Weekly natural gas inventories (prior +41 bcf)
Fair Value for Thursday, July 27:
S&P 500: 4,594
Nasdaq 100: 15,604
DJIA: 35,672