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. This will bring the rate to a high range of 2.5%. Fed officials say the neutral rate is at that level (ie, 2.5%). If starting to raise rates is step 1 in the Fed’s process, reaching neutrality will be step 2. The Fed is expected to continue raising rates to quell inflation by the end of the year with expectations for in a year and rate close to 3.5% (an additional 100 basis points). For a preview of the FOMC decision see Adam’s video HERE.
To start the trading day, the EUR was the strongest while the NZD was the weakest. The USD tends to be more vulnerable to most moderate declines compared to most major currencies. The one exception was the NZD (up 0.06% in the morning snapshot).
US stocks are set to open higher after earnings and guidance from Alphabet (up 4%) and Microsoft (up 2.9%) eased some market jitters. Now after close Meta, Ford, Qualcomm, ServiceNow will highlight earnings. Tomorrow the likes of Amazon, Intel, Apple will report after the close. Before tomorrow, Pfizer, Southwest, Mastercard, and Merck will report. On Friday, oil companies including Exxon Mobil, Chevron, Phillips 66 along with Colgate-Palmolive and P&G will report.
US yields were slightly higher in early US trade.
Yesterday, 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 expected 1M and -0.9M respectively. Crude oil prices were almost a dollar higher in the premarket. Natural gas was trading mostly unchanged at $8.60 after hitting yesterday’s high of $9.39, just short of the June peak of $9.63.
A snapshot of the markets shows.
- Gold is trading up $5.65 or 0.34% at $1722.09
- silver was trading up $0.20 or 1.13% at $18.83
- Crude oil was trading at $96.10, up $1.10 on the day
- The price of bitcoin traded at $21,268 to $350 during the day. Yesterday the low reached $20,700. Check out the VIDEO here
In the premarket for US stocks, major indexes were higher after yesterday’s decline:
- The Dow industrial average rose 160 points after yesterday’s -228.5 point decline
- The S&P index rose 35.5 points after yesterday’s -45.79 point decline
- The NASDAQ index rose about 180 points after yesterday’s 220.09 point decline
In European equity markets, major indices also traded higher
- German DAX, +0.56%
- France’s CAC, +0.52%
- UK’s FTSE 100 +0.66%
- Ibex of Spain +0.63%
- Italy’s FTSE MIB +0.91%
The US debt market, yields were slightly higher