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Coffee With Greta: Waiting For The Fed


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DJIA Futures: -18 (-0.1%)

SPX Futures: -2 (-0.1%)

NASDAQ Futures: -22 (-0.1%)

Good morning friends!

Futures are lower as traders wait for Wednesday’s Fed decision.

Let’s get right to it!

Housing Starts Plunge, Building Permits Rise

U.S. new home construction tumbled far more than expected in August. 

The Census Bureau reported housing starts plunged 11.3% last month to a seasonally adjusted annual rate of 1.28 million units vs 1.43 million expected.

That was the lowest level of starts since June 2020 and down 14.8% year over year. 

Single-family construction dropped 4.3% while multi-family construction tumbled 26.3%.

But building may rebound in the months ahead as permits issued rose more than expected. 

Building permits jumped 6.9% to 1.54 million units vs 1.45 million expected. 

Single-family permits rose 2% while multi-family permits jumped 14.8%.

Fed Meeting Begins

The Federal Open Market Committee will kickoff its two-day policy meeting today with the rate decision on Wednesday. 

CME Group’s FedWatch Tool still shows 99% of traders expecting no rate hike. 

Focus for the market will be on the Fed’s messaging about future policy decisions. 

There are still two more Fed meetings this year, on November 1 and December 13. 

Currently, 28.8% of traders see the possibility of a rate hike in November and 35.4% in December.

Oil Rally Continues

Oil prices are rising for the fourth straight session. 

West Texas Intermediate crude futures are up 1.4% at over $92.70 bbl with Brent crude futures up 0.8% at over $95 bbl.

Prices have been rising for three consecutive weeks amid supply concerns.

The Energy Information Administration reported Monday that U.S. shale output is on track to fall by 9.393 million barrels per day in October.

That would be the third straight monthly decline and puts more pressure on global supply. 

Rocket Lab Plunges After Satellite Launch Failure

Rocket Lab USA (RKLB) shares are plunging 18.1% ahead of the open after a failed satellite launch early this morning. 

The company confirmed its 41st Electron rocket launch from New Zealand failed about 2 minutes and 30 seconds into the flight. 

The rocket was carrying the Acadia 2 satellite for San Francisco-based Capella space.

It was the first failed launch for the company in over two years.

Rocket Lab said it is working with the FAA to determine the cause of the issue and postponed its next launch.

As a result of that postponement, the company expects to issue revised Q3 guidance.

In Case You Missed It

  • Homebuilder sentiment fell more than expected this month. The National Association of Homebuilders’ sentiment index dropped 5 points to 45 vs 49.5 expected. It’s the first time confidence among builders has turned negative in 7 months as higher mortgage rates hurt affordability. Sentiment about current sales conditions fell 6 points to 51, buyer traffic decreased 5 points to 30, and six-month sales expectations dropped 6 points to 49.

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