Today is the conclusion of the FOMC meeting and it is almost unanimous that the Committee will not lower rates or adjust its balance sheet. Moreover, most agree there will be little change in the statement with perhaps some downgrading of the growth and uncertainty components. During the post-meeting press conference there might be questions about political interference in the Fed.
Will Fed attention now be focused on the upcoming Jackosn Hole Symposium held at the end of August, an event where the Central Bank often outlines a new policy direction? Perhaps.
Commenting on the JOLTS Job openings, openings fell in June after rising the prior two months. While the data nominally missed expectations, the statistics indicate a generally stable demand for workers with openings still higher than pre pandemic levels. Layoffs were little changed, at a subdued level.
Today is the release of the initial estimates of second quarter GDP. Several months ago, the vast majority were forecasting a severe economic downturn accompanied by steep inflation because of the tariffs. The economy is expected to expand at an annual rate of 2.5%, up from a 0.5% contraction experienced in the first quarter. The GDP Price Index—a key measure of inflation utilized by the Fed—is forecasted to increase by 2.2%, down from last quarter’s 3.8% increase.
How will the markets respond to the data?
After the closed MSFT post results. Tomorrow both AMZN and AAPL releases earnings. Writing the incredibly obvious, the interpretation of their quarterly reports can greatly influence market direction and outlook.
Regearing yesterday’s market action, equities were quietly lower. Treasuries posted nominal gains following a “solid” 7-year Treasury auction.
Last night the foreign markets were mixed. London was down 0.26%, Paris up 0.43% and Frankfurt up 0.16%. China was up 0.17%, Japan down 0.05% and Hang Seng down 1.36%.
Futures are flat ahead of the outcome of the Fed meeting, GDP data and mega cap earnings. The 10-year is off 2/32 to yield 4.34%.
