Why the Fed Decision Was More Bullish Than It Seemed
What’s in Today’s Report:
- Why the FOMC Decision Was More Bullish Than It Seemed
- Economic Data Update: Is the Recovery Starting to Stall?
- EIA and Oil Update
Futures are moderately higher as markets digest a “more positive than it appeared” FOMC decision on Wednesday, along with growing expectations for a stimulus bill.
Regarding stimulus, expectations for the total size of the bill have grown from $700 billion-ish to $900 billion-ish, and passage is now expected before next week.
The Dollar Index dropped sharply and fell below 0.90 for the first time since ‘18, and that’s helping futures rally. The dollar decline is the result of the FOMC decision yesterday.
Stimulus headlines will dominate trading today as markets expect a deal in the next few days, and anything that further confirms that will be a tailwind on stocks.
Stimulus aside, though, there are also important economic reports today. The key number is Jobless Claims (E: 806K), followed by Philadelphia Fed Manufacturing Index (E: 21.2). Both numbers need to show stability and push back on the growing narrative that the economic recovery is losing momentum. We also get Housing Starts (E: 1.53M but that shouldn’t move markets.