Futures Dip Ahead of Potentially Hawkish Fed Minutes
Good morning, folks! It was a relatively quiet overnight session with futures drifting sideways and trading essentially flat as we approach the open. As of 8:45AM the Dow is down -0.20% to 35,187, the S&P is down -0.11% to 4,438.75, the Russell is up 0.11% to 2,176.90, and the Nasdaq is down -0.3% to 14,989.75.
Traders will be keeping a close eye on today's Fed minutes (from July) for any hints/announcements of balance sheet tapering, changes to the inflation/economic outlook, and of course, any changes in rates. It's unlikely we'll see any major policy changes from the last meeting, however, I do expect more of the members to begin turning hawkish as PPI approaches 8% and CPI 5.5%. Some analysts expect the Fed to announce a taper schedule to begin as early as October and to run for as long as 10 months into mid 2022. That sounds about right, but if markets or the economy react poorly to the Fed's tighter policy stance, how long until they reverse course (again)? Wash, rinse, repeat.
Moments ago we saw the MBA Mortgage Applications Index come in at -3.9% vs the prior print of 2.8%. We also saw Housing Starts come in at 1,534k vs the 1,610k expected, while Building Permits rose 1,635k vs the 1,610k expected. At 10:30AM we'll see the latest EIA Crude Oil Inventories, and then of course, at 2:00PM we'll get the July Fed minutes followed by the Powell Q&A.
* I am/we are currently long HUV, UVXY
Traders will be keeping a close eye on today's Fed minutes (from July) for any hints/announcements of balance sheet tapering, changes to the inflation/economic outlook, and of course, any changes in rates. It's unlikely we'll see any major policy changes from the last meeting, however, I do expect more of the members to begin turning hawkish as PPI approaches 8% and CPI 5.5%. Some analysts expect the Fed to announce a taper schedule to begin as early as October and to run for as long as 10 months into mid 2022. That sounds about right, but if markets or the economy react poorly to the Fed's tighter policy stance, how long until they reverse course (again)? Wash, rinse, repeat.
Moments ago we saw the MBA Mortgage Applications Index come in at -3.9% vs the prior print of 2.8%. We also saw Housing Starts come in at 1,534k vs the 1,610k expected, while Building Permits rose 1,635k vs the 1,610k expected. At 10:30AM we'll see the latest EIA Crude Oil Inventories, and then of course, at 2:00PM we'll get the July Fed minutes followed by the Powell Q&A.
* I am/we are currently long HUV, UVXY