2023-01-10 17:17:27
#Calls
By JayTrader Hi Birbs!
What a great start to the year with lots of profitable trades and many more to come!
Here’s a few things to note for the week:
1. Fed Chair Powell speaks on Tuesday2. December CPI released Thursday3. Unemployment claims Thursday4. Fed member Harker speaks on Thursday5. Consumer sentiment Friday 6. Banks begin reporting Q4 2022 earnings FridayHere’s the CPI expectations:
US CPI +0.0% MoM; 6.5% YoYUS Core CPI: +0.3% MoM; 5.7% YoYIf the inflation readings comes in at or close to these expectations, this will show year-over-year price growth moderation and help solidify a 25bps Fed rate hike for February. That’s a more bullish backdrop for risk assets and likely why the market is seeing some relief currently.
Jobless claims come out in tandem with the CPI numbers on Thursday and could help reinforce each other. The Fed is trying to cool everything off, so if unemployment turns in higher than expected it's possible the market digests this in a positive way.
Fed chair Jerome Powell and Patrick T. Harker from the Philly Fed are set to speak on Tuesday and Thursday respectively. They will likely reinforce the FOMC's hawkish policy stance, but we’ll be on the lookout for any new thought-provoking statements. I'm interested to see if Powell acknowledges the silver lining of last week's softer Services PMI print.
The recent uptick in consumer sentiment signifies that inflation and employment expectations are improving. A drop on the reading could still be interpreted as good news by Fed watchers.
Wall Street banks have seen drop-offs in dealmaking revenues, and have been trimming their workforces. They’ll likely offer below-average results. This earnings season is especially important because it will help shape Fed policy expectations. A broad upside surprise would allow the Fed to turn more dovish.
That’s all for today. Have a great week!
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