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Fed Meeting Preview and Saudi Oil Update

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What’s in Today’s Report:

  • FOMC Preview
  • Two Sectors that Will Benefit from the Saudi Oil Attacks
  • What the Attacks on Saudi Oil Infrastructure Mean for Oil

Futures are suffering mild losses this morning while international markets were little changed overnight as oil prices are stabilizing, economic data was mixed, and investor focus is shifting to the Fed.

Economically, the German ZEW Survey showed the Current Conditions index fell to –19.9 vs. (E) -15.0 but the Business Expectations figure was encouragingly –22.5 vs. (E) -38.0, easing concerns about the future outlook for the EU economy.

The PBOC left rates unchanged overnight, disappointing some investors looking for a cut after a recent string of soft economic data which weighed on Asian markets.

Looking into today’s session, there are two economic reports to watch: Industrial Production (E: 0.1%) and the Housing Market Index (E: 66) but a sense of “Fed paralysis” is already falling over the markets as focus turns to tomorrow’s announcement and press conference.

Lastly, after oil’s huge moves yesterday, the energy complex will continue to get attention and with the geopolitical situation still very fluid, oil prices and U.S.-Iran tensions could affect trading in stocks today.

Will the Fed Cut Rates?

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What’s in Today’s Report:

  • FOMC Preview

U.S. futures and most international equity markets were mildly lower overnight after corporate results from GOOGL missed estimates while economic data was mixed.

China’s PMI Manufacturing Index fell to 50.2 from 50.8 in April (but importantly remained above 50, in expansion territory) while the Eurozone Q1 GDP Flash was 1.2% vs. (E) 1.1% year-over-year which helped ease recently rising concerns about weakness in EU growth metrics.

Looking into today’s session, the calendar remains busy however with the FOMC Meeting getting underway, it would take a material surprise in economic data or multiple earnings shocks to really move the market ahead of tomorrow’s Announcement and Powell’s press conference.

Economically, there are four releases to watch this morning: Employment Cost Index (E: 0.7%), S&P Case-Shiller HPI (E: 0.3%), Consumer Confidence (E: 127.0) and Pending Home Sales (E: 0.7%).

On the earnings front, there are several notable companies releasing reports today including: GE ($0.09), MA ($1.67), BP ($0.68%), GM ($1.09), PFE ($0.76), and STX ($0.72) before the open and AAPL ($2.37) and AMD ($0.05) after the market close.