It’s Fed Day.
The Fed is expected to raise rates by 75 basis points when they announce their rate decision at 2 PM ET. That would take the rate to a high range of 2.5%. Fed officials have said the neutral rate is at that level (i.e, 2.5%). If starting to raise rates was step 1 in the Fed’s process, reaching neutrality would be step 2. The Fed is expected to continue to raise rates to snuff out inflation into the year end with the expectations for a year and rate near 3.5% (an additional 100 basis point). For a preview of the FOMC decision see Adam’s video HERE.
To start the trading day, the EUR is the strongest while the NZD is the weakest. The USD is mostly weaker with mostly modest declines vs. most of the major currencies. The one exception is the NZD (up 0.06% in the morning snapshot).
US stocks are set to open higher after Alphabet (up 4%) and Microsoft (up 2.9%) earnings and guidance eased some market anxiety. Today after the close Meta, Ford, Qualcomm, ServiceNow will highlight the earnings. Tomorrow the likes of Amazon, Intel, Apple will report after the close. Before the open tomorrow Pfizer, Southwest, Mastercard, and Merck will report. On Friday, the oil companies including Exxon Mobil, Chevron, Phillips 66 will report along with Colgate-Palmolive and P&G.
US yields are marginally higher in early US trading.
Yesterday, the private inventory data showed a 4 million barrel drop in crude oil for the week ending July 22. Gasoline inventories showed a draw of about 1M barrels. Both were higher than expectations of 1M and -0.9M respectively. The price of crude oil is higher by about a dollar in the premarket. Natural gas is trading near unchanged at $8.60 after reaching a high yesterday of $9.39, just short of the June high of $9.63.
A snapshot of markets are showing.
- Gold is trading up $5.65 or 0.34% at $1722.09
- silver is trading up $0.20 or 1.13% at $18.83
- crude oil is trading at $96.10 that’s up $1.10 on the day
- The price bitcoin is trading at $21,268 up about $350 on the day. Yesterday the low reached $20,700. See VIDEO here
In the premarket for US stocks, the major indices are higher after yesterdays declines:
- Dow industrial average up 160 points after yesterdays -228.5 point decline
- S&P index is up 35.5 points after yesterdays -45.79 point decline
- NASDAQ index is up about 180 points after yesterdays 220.09 point decline
In the European equity markets, the major indices are also trading higher
- German DAX, +0.56%
- France’s CAC, +0.52%
- UK’s FTSE 100 +0.66%
- Spain’s Ibex +0.63%
- Italy’s FTSE MIB +0.91%
The US debt market, yields are marginally higher