Next 13 Trading Sessions to Determine Stock Market's Fate
The key catalysts in determining whether this year's stock-market revival gets derailed or picks up steam after a February slump will be four major events over the next 13 trading sessions.
Powell Testimony
All begins Tuesday when Federal Reverse Chair Jerome Powell delivers his biannual monetary testimony to the US Senate Banking Committee and the House Financial Services Committee. Investors will look for hints on the economic outlook, inflation, wage pressures and employment. Traders will also look for clues on whether there are additional steps to control elevated prices.
Jobs Report
After Powell, comes the February jobs report on March 10. The February unemployment rate is expected to hold at 3.4%. Nonfarm payroll growth is likely to fall to 215,000.
As shown in January, the labor market remained strong, with wage growth driving higher prices. Some traders even priced in that the Fed wouldn't pause rate hikes this year. But ultimately, the data comes down to wages and whether the Fed thinks they're slowing fast enough to lower inflation.
Inflation Data
Then, on March 14, the February consumer price index will be released. Any indication of ongoing inflation could lead the Fed to raise rates even further than expected. The February CPI is set to drop to 6% from January's 6.4%. The forecast for Core CPI is 5.4% in February.
Fed Decision
Interest rates are expected to peak at 5.4% in September, and the market has already priced that in. Traders are bracing for the possibility that the Fed will return to jumbo rate hikes.
Powell's remarks following the decision and the Fed's future expectations will have an impact on market sentiment.
Forward implied volatility is back in the low 30s for the consumer-price-index day and nearing 40 for Fed rate-decision day later, meaning traders are betting on some big swings, data compiled by Citigroup show. However, a forward implied volatility reading of 26 on jobs data day indicates the market is underpricing that risk, according to Stuart Kaiser, Citigroup's head of US equity trading strategy.
Source: Bloomberg
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
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RR000BBBBB : only need 1
RDK79 : Wonder who will look at this article in 13 trading days and say ‘what bs’ ..
101814969 : At this moment of time, I remember what the gurus say,
picking time
RDK79 RDK79 : Half way there. All I see so far is the same wallowing up and down, and aside from a few special cases still a general trend down. No matter what good news tries to surface, debt ceiling battle and pre 24 election will create more chaos too.