Friends

Well, the FOMC meeting begins tomorrow, and we’ll get an announcement from the Fed on monetary policy on Wednesday afternoon. As mentioned, the markets are expecting the Fed to raise the Fed Funds rate a quarter of a point. I’m still not convinced that will happen, but the bond market has already given the Fed the room they need. The 10-Year Treasury Note traded up to 5% at one point today but the 2 year at 4.65% is the real tell. Whatever the Fed decides markets are going to react. Which direction is anyone’s guess.

As for today, it was another losing session for stocks with the Dow Jones Industrial Average down 152 points to close at 52,421. The S&P 500 was down 37 points to close at 7,619. The Nasdaq Composite Index was down 146 points to close at 26,186. Gold was down $76 to trade at $4,333 per ounce, while oil was up $1.31 to trade at $101.36 per barrel WTI.

As we have mentioned, higher oil prices and higher interest rates are headwinds for stocks. A 5% ten-year yield is nothing to panic about, it’s more the direction and speed of a move that gets traders’ attention. Buckle up, it should be an interesting week for the markets.

Have a nice evening everyone.

Jim