OPEC Follow up

Still no confirmation of meeting between Russia/Opec. But plenty of jaw- boning and these bearish for prices comments

  • OPEC Delegates said no No Plan yet for meeting w/Russia
  • Iran  seen to challenge any deal to cut production

No worries though as the Flood of Bullish comment were reported quickly after:Senior gulf delegate   says of Possible OPEC-Non -Opec deal”The door is open  and all possibilities are there”. and “Saudi Arabia and Gulf nations willing to cooperate to stabilize markets”

The option to cooperate is there  but will they follow through with it.The USA  will not cooperate with cuts ,so why would Saudi Arabia want to throw a lifeline to shale?

I’m still waiting to hear a confirmation or denial  from Saudi Arabia

Oil

More comments from Russia hinting at an OPEC-Russian meeting next month where they could agree to jointly cut production by 5%!  All we have heard from is Russia on this matter waiting to hear from  Saudi Arabia  or Some high Ranking OPEC members. This very well could be just talk,but is has accomplished its goal.The shorts are covering,Downside may be limited for a time.This all done without actually changing any production.

RBOB,GASOIL  and  Heating oil all strong as expected.Stock market Strong as well  the energy sector will drive the broader market higher on the cash open

Afternoon swoon

Just a thought,  that the post Fed meeting sell  off  in stocks has less to do with  what the  Fed said and more to do with the ongoing  trend of Weak NASDAQ stocks?Fang stocks been trending down/sideways all day.Once fed statement out of way the trend accelerated to downside.Same with biotech .Maybe the market wanted more from the fed or  they just wanted Fed out of the way. Something to think about as Nasdaq down 108 points. 93 -100 NDX stock down on day.

FB still has to report,Amzn as well.Apple did not set a good precedent for tech stocks

Earnings after the Close

Not done with the big name earnings yet.Maybe  the fed wants to release another statement?

  • FB,Ebay,Qualcomm and Sandisk all after the close today.
  • Apple down 6%,$92  better hold  or  were  all in trouble
  • FB -2.8%,Goog -2.7%
  • Ibb  (biotech)  -3.55% today
  • energy only down 1.3% technology and Consumer discretionary sectors leading the drop in SPX
  • As long as SPX  doesn’t close below 1859  we are okay

Thoughts FOMC

Fed pulled the balance of risks reference  from their Statement, as they reassess the global outlook.I believe no rate hikes until the global issues get worked out,once that happens then the fed can be more confident in its outlook. Labor  market still solid and continues to improve even as economic growth   slows. so says  the Fed.

Inflation more  of a worry  but still no change to expectations  that  it will get back to 2% in the medium term.But as the fed indicates that it is monitoring the Global economic and financial developments closely as to their impact on US labor markets and inflation.Continued weakness  Worldwide  and  Stronger dollar  will do nothing  but add to US deflation

i think Fed said too much about global issues and this has the markets spooked

FOMC thoughts

No Change in rates expected.

Statement is expected to lean towards the dovish side as the fed will likely acknowledge a hiccup in Q4 growth and A  decrease in inflation expectations due to the crash in oil.The fed has to be careful here because they don’t want  to scare traders by sounding like  the world is ending,but they cant simply ignore the obvious slowdown.

In the last fed statement  they said”taking into account domestic and International developments the committee sees the risk to the outlook for both Economic activity and the labor market as balanced”  they fed could tweek this as an acknowledgement of slowdown.

I believe the fed will indicate strength in labor markets and repeat that they will continue to assess realized and expected economic  conditions in determining the next rate adjustment.labor market strength  keeps rate hike bias intact.

  • Statement left unchanged from Last Month=Hawkish
  • Statement explicitly mentions overseas/ international worries as reason  for no rate hikes=Dovish
  • 27%  of march hike