The Market Week Ahead: Sep. 16 – Sep. 20

 

Sep. 16, 2019 –  This week is all about the Federal Reserve.

That seems strange because markets are supposed to be efficient and basically everyone expects a 25 basis-point rate cut. If everyone expects something, it should already be priced in. Which should make the Fed meeting a non-event as far is the market is concerned.

This is true, so far the market wouldn’t react much if all we were getting was a 0.25% reduction in overnight lending rates, but we’ll also be getting the usual written statement and a press conference from Jay Powell. In addition, this meeting comes with the periodic economic projections and a plot of future rate expectations. 

There will certainly be a lot of curiosity around those economic forecasts, given the weakening of economic data we’ve seen since the last set in June. The Fed has consistently over-estimated the expansion though, so we shouldn’t expect the forecasts to be accurate, what are useful for is giving us an idea of how the Fed feels about the economy, which can help point us in the direction of where rates might go next.

Where all of this gets complicated, and where it really starts to matter for stock traders, is how Fed policy and trade policy work together. Lower interest rates will help the economy run a little hotter than it would otherwise, which means the effect of President Trump’s trade war will be less severe.

As we mentioned Friday, there has been some talk about a preliminary deal between the U.S. and China, but there has been no new information on that front over the weekend. More could develop later this week, and we’ll also be keeping an eye on the oil market after this weekend’s attack on facilities in Saudi Arabia. In the short term, we’d expect oil prices to come back down a bit after the big spike today.

Economic Events this Week

The Federal Reserve meeting is really the only thing on this list that matters this week. All the other data will be viewed through a Fed-centric lens. We’re not saying this is a good idea, but that’s how market is going to trade all the data this week.

  • Tuesday
    • 9:15 a.m. – Industrial Production
    • 9:15 a.m. – Capacity Utilization
  •  Wednesday
    • 8:30 a.m. – Housing Starts
    • 8:30 a.m. – Building Permits
    • 10:30 a.m. – EIA Crude Oil Inventories
    • 2:00 p.m. – FOMC Rate Decision
  • Thursday
    • 10:00 a.m. – Existing Home Sales

Earnings Reports this Week

This is one of the slowest weeks for the earnings calendar.

Tuesday:

  • Before the bell: CBRL
  • After the bell: ADBE, FDX, CHWY

Wednesday:

  • Before the bell: GIS
  • After the bell: None

Thursday:

  • Before the bell: DRI
  • After the bell: SCS, SCHL

Friday:

  • Before the bell: None

Sector Analysis 

Strong Sectors past Month

These sectors are up 5% or more in the last 20 trading days:

  • Oil Services
  • Oil & Gas Exploration
  • Steel
  • Retail
  • Metals & Mining
  • Robotics & Automation
  • Banking
  • Regional Banking
  • Semiconductors
  • Multimedia Networking

Weak sectors past month

These sectors are down 5% or more in the last 20 trading days:

  • Junior Gold Miners
  • Gold Miners

Strong sectors past five trading days

These sectors are up more than 3% in the last five days.

  • Oil & Gas Exploration
  • Oil Services
  • Metals & Mining
  • Regional Banking
  • Banking
  • Biotechnology
  • Agriculture
  • Retail
  • Multimedia Networking

Weak sectors past five trading days

These sectors are down more than 3% in the last five days.

  • Junior Gold Miners
  • Gold Miners

Bobby Raines

Bobby Raines

Bobby Raines is the Managing Editor of the Market Intelligence Center. He has degrees in Mass Communications and History from Emory & Henry College. Bobby worked at a mid-sized daily newspaper before making a switch to covering the financial industry full time in the years leading up to the financial crisis. He has been a member of the Fresh Brewed Media team since 2011 and has served as a writer and analyst. You can write to him at braines@marketintelligencecenter.com or follow him on Twitter: @BRatMICenter.

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