Why Did Banks Drop Yesterday?
What’s in Today’s Report:
- Why Did Banks Drop Yesterday?
- Technical Update: Two S&P 500 Charts to Watch
Futures are slightly higher despite more pain in regional bank shares in the pre-market and soft tech earnings from late yesterday as focus shifts to today’s Fed decision.
AMD is down 7%+ after a disappointing sales forecast late yesterday while shares of PACW and WAL (which fell sharply yesterday and weighed on the broader banking complex) are both down 7% to 12% in pre-market trade this morning.
Economically, Australian Retail Sales were better than expected while the Eurozone Unemployment Rate dipped which saw bond yields move off the overnight lows.
Looking into today’s session there are two important economic reports to watch as they could alter Fed policy expectations depending on how they come in. The ADP Employment Report (E: 143K) is due out before the bell while the ISM Services Index (E: 51.7) will be released at the top of the 10:00 a.m. hour ET.
From there focus will turn to the Fed with the FOMC Decision at 2:00 p.m. ET (E: +25 bp) and Fed Chair Powell’s press conference at 2:30 p.m. ET. How the Fed handles forward guidance in the statement and any insights Powell provides in the presser will be the key factors in determining whether stocks extend yesterday’s declines or stabilize and recover to test the YTD highs.
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