The Fed’s 2-day meeting culminates today with a statement on the economy, rates and their expectations going forward. Nobody expects them to raise rates – even if the market hadn’t fallen the last couple weeks – but with the 2016 losses, Wall St. now wants to be reassured that if things get worse, the Fed is ready, willing and able to do something. I’m not sure why Wall St. has this attitude. Over history, we have a recession about ever 5 years. Things suck for a year or so, but then they get better and it’s back to business as usual. As of now it’s been 7 years since the last recession, but Wall St. seems to think we should never have a recession again, that as soon as the economy weakens, the Fed should do something to prevent it. It is what it is, and from a trading standpoint, the market is likely to sell off if the Fed isn’t extremely dovish. That means they better not talk tough. They must fully recognize the state of things in the US and overseas, otherwise Wall St. will think “they don’t have a clue.” The Fed has become a big ass-kisser the last few years, so I’m sure Wall St. will get what it wants.
Once the Fed is done, all attention will turn to earnings season. Apple is down premarket. They forecast their first revenue drop in 13 years. Tim Cook said: “We’re seeing extreme conditions unlike anything we have ever experienced before.” AAPL has struggled since last summer. Wall St wants the next big thing from the company. The iWatch isn’t it. TV doesn’t seem to be it. There are problems with their self-driving car development.
That’s it for now. The Fed is front and center.
from Jason Leavitt
