Coffee With Greta: FOMC In Focus
DJIA Futures: +6 (+0.02%)
SPX Futures: -3 (-0.1%)
NASDAQ Futures: -12 (-0.1%)
Good morning friends!
Futures are flat as traders await today’s Fed decision.
Let’s get right to it!
FOMC In Focus
The Federal Open Market Committee releases its rate hike decision at 2:00 p.m. ET today.
CME Group’s FedWatch Tool still shows 79.4% of traders expecting the Fed to vote for a 50 bps hike.
That would be a pivot to smaller moves after four consecutive 75 bps hikes so far this year.
The hike comes after new data on Tuesday showed consumer inflation slowing to an annual pace of 7.1%.
That was lower than expectations but is still more than 3.5x the Fed’s target rate of 2%.
Traders will also be focused on the Fed’s summary of economic projections and where that shows rates peaking in 2023.
Fed Chair Jerome Powell speaks at 2:30 p.m. ET.
Mortgage Demand Rises Amid Lower Rates
Mortgage application volume is rising again as rates have cooled.
The Mortgage Bankers Association reported total applications rose 3.2% last week compared to the previous week.
Purchase applications rose 4% weekly and were down 38% year over year.
Refinance applications rose 3% weekly but were still 85% lower on an annual basis.
The average 30-year fixed contract rate increased slightly to 6.42% from 6.41%.
But that’s down from the peak of just over 7% in October
Delta Rallies On Strong Forecast
Delta Airlines (DAL) shares are up 3.9% ahead of the open after the company hiked its 2023 outlook.
The airline expects adjusted EPS to nearly double next year to as much as $6 per share.
The company also forecast a 15% to 20% increase in revenue next year from this year.
And free cash flow is expected to rise to more than $4 billion in 2023 from more than $2 billion this year.
CEO Ed Bastian said, “Demand for air travel remains robust as we exit the year and Delta’s momentum is building.”
Delta also raised its Q4 earnings forecast to a range of $1.35 to $1.40 per share up from $1 to $1.25 per share previously.
Total revenue is also expected to be 7% to 8% higher than Q4 2019.
Oil Prices Rise On Optimism for 2023 Demand
Oil prices are rising this morning amid forecasts for demand to rise in 2023.
West Texas Intermediate crude futures are up 0.7% to $76 bbl while Brent crude futures are up 0.7% to over $81 bbl.
New data from the American Petroleum Institute on Wednesday showed U.S. crude inventories rose unexpectedly by 7.8 million barrels last week.
The Energy Information Administration reports official supply levels later today.
Meanwhile, the International Energy Agency raised its 2023 oil demand estimate by 1.7 million barrels per day, now totaling 101.6 million bpd.
OPEC also said it is expecting oil demand to grow by 2.25 million bpd in 2023 to 101.8 million bpd.