FOMC Preview: Is a Dovish Surprise Looming?

What’s in Today’s Report:

• FOMC Preview – Is a Dovish Surprise Looming?
• Chart: An End to QT Means More Liquidity, More Stimulus

Futures are flat while most international markets are modestly lower as traders digest the sizeable two-day rally in stocks ahead of the October Fed meeting decision and several Mag-7 earnings releases.

Today, there are a handful of private-sector economic releases to watch including the Case-Shiller Home Price Index (E: 1.9%), the FHFA House Price Index (E: 0.1%), the Richmond Fed Manufacturing Index (E: -14), and Consumer Confidence (E: 93.4).

With the October FOMC meeting getting underway, expect a growing sense of Fed paralysis in equity markets to begin to take hold, however there is a 7-Yr Treasury Note auction at 1:00 p.m. ET that could move yields and shake up stocks on an intraday basis.

Earnings season continues to peak this week with notable reports today including SOFI ($0.09), UNH ($2.80), PYPL ($1.19), UPS ($1.31), V ($2.97), BKNG ($96.10), and RCL ($5.67).

Bottom line, positive earnings and upbeat economic data would offer equity market tailwinds today with a Fed rate cut all but a certainty tomorrow, however, the trade war situation remains a “wildcard” risk that could spark risk-off money flows into tomorrows FOMC decision.