A Flash of Fear: FOMC Technical Preview
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What’s in Today’s Report:
- FOMC Technical Preview – A Flash of Fear in the Market (Shareable PDF By Request)
- More Hot Inflation Data: Employment Cost Index and Case Shiller/FHFA Home Price Indices
- Chart: Stagflation Concerns Bring Focus Back to the Yield Curve
Futures are lower as stagflation fears continue to weigh on risk assets while earnings were mixed overnight with AMZN reporting strong quarterly cloud sales (the stock is up 2%+) while AMD’s AI-chip demand forecast disappointed (the stock is down 6%+).
Economically, the U.K.’s April Manufacturing PMI was better than feared, rising to 49.1 vs. (E) 48.7 which is helping the FTSE buck the heavy trend across global equity markets this morning.
Looking into today’s session, focus will be on economic data early with the ADP Private Payrolls (E: 175K), ISM Manufacturing Index (E: 50.0), Construction Spending (E: 0.3%), and JOLTS (E: 8.7 million) all due to be released by 10 a.m. ET.
Additionally, the Treasury Refunding Announcement (8:30 a.m. ET) for which estimates sparked some volatility earlier in the week, could move bond markets and subsequently impact equities in the pre-market.
In the afternoon, focus will turn to the Fed with the FOMC Announcement at 2:00 p.m. ET followed by Fed Chair Powell’s Press Conference at 2:30 p.m. ET.
Earnings season takes a breather today before AAPL and other tech companies report tomorrow but there are still a few notables to monitor today including: MA ($3.22), CVS ($1.69), QCOM ($2.31).
Bottom line, there are a lot of potential catalysts for markets today but the key to stocks stabilizing will be economic data that contradicts recent signs of stagflation emerging in the economy and a benign Fed day with an as-expected to dovish announcement and no surprises from Chair Powell. Otherwise, we could easily see a test or breakdown through the April lows in the S&P 500 today.
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