The Volatility Index to Watch (Not VIX)

What’s in Today’s Report:

  • The More Important Volatility Index to Watch
  • Was Clarida Hawkish?

Futures are bouncing modestly this morning as US-China trade sentiment improved incrementally overnight and CRM earnings beat, helping bolster the beat up tech space.

On trade, the Washington Post printed another Trump interview overnight.

There were no material changes in tone, but the market is increasingly pricing in a “trade truce” of some kind resulting from the Trump-XI meeting at the G20 which is being well received by global investors so far today.

In the U.S., there are a few economic reports to watch that could move the market: GDP (E: 3.5%), International Trade in Goods (E: -$76.8B) and New Home Sales (E: 575K).

But, investor focus will be primarily on the Fed today as one of the two “events to decide the year” will happen over the lunch hour with Powell speaking in New York at 11:30 a.m. ET.

Expectations have shifted increasingly dovish so there is a risk he disappoints, but mention of inflation concerns or “flexibility” regarding 2019 rate hikes should be well received and act as a tailwind for stocks.