Coffee With Greta: Most Important Week of the Summer
DJIA Futures: +138 (+0.4%)
SPX Futures: +14 (+0.4%)
NASDAQ Futures: +29 (+0.2%)
Good morning friends!
Futures are gaining as traders gear up for a key week of earnings and economic data.
Let’s get right to it!
Traders Brace for Fed Week, Earnings, Inflation Data
Traders are bracing for a big week of market-moving news.
The Fed meeting kicks off Tuesday with the rate hike decision released Wednesday afternoon.
This week also includes earnings results from big-tech names like Microsoft (MSFT), Alphabet (GOOGL), Meta Platforms (META), and more.
We’ll find out if the U.S. is already in a technical recession with the release of Q2 GDP data on Thursday.
And then the Fed’s favorite inflation gauge, the June Core PCE Price Index, will be released on Friday.
Many analysts say this will be the “most important week of the summer”.
Market Predicts 75 Basis Point Rate Hike
The majority of the market is betting the Fed will stick with a 75 basis point rate hike at this week’s meeting.
CME Group’s FedWatch Tool shows 77.5% of traders leaning toward that smaller move over a 100 basis point hike.
The Fed has said lowering inflation is its top priority, even if it causes a recession in the meantime.
Treasury Yields Rise
Treasury yields are pushing higher today ahead of the Fed decision.
The 2-year yield is up 2 basis points to 3.01% while the 10-year yield is up 5 basis points to 2.83%.
The curve between the 2-year and 10-year yield is still inverted, which many believe is a sign of an impending recession.
Treasury Secretary Janet Yellen downplayed that risk on NBC Sunday saying there are signs the U.S. economy is at risk of recession but it’s not inevitable.
Oil Prices Rise Ahead of Fed Meeting
Oil prices are rising as the market continues to weigh supply concerns against demand worries.
West Texas Intermediate crude futures are up 1.7% to over $96 bbl while Brent crude futures are up 1.3% to $104.50 bbl.
Analysts say rising fears over a global recession will likely limit short term price gains.
Gas Prices Tumble
U.S. gas prices fell for the 40th day in a row today.
AAA shows the national average for regular gas fell more than 1 cent overnight to $4.355/gal.
That’s down more than 66 cents from the record-high in June but still $1.20 higher than 1-year ago.
The national average for diesel also fell 1 cent overnight to $5.412/gal.
Diesel has dropped 40 cents from its record-high but is still $2.14 higher than this same time last year.