FOMC Center Stage - No Change Expected

Stocks opened down slightly, then ground sideways until 3 pm when a late-day selloff closed us on the lows Tuesday.  Overall, it was a blah summer day, seeming to wait on Fed news or some other catalyst. On the day, SPY closed down 0.59%, DIA down 0.76%, and QQQ down 1.27%.  Oddly on a down day, VXX also closed down to 29.17, but as expected T2122 also fell just a touch to 78.07.  10-year bond yields were flat at 0.579% and Oil (WTI) fell back to $40.93/barrel.  On the upside, Gold closed at another all-time high.

During the afternoon, the Fed announced it is extending its pandemic loan programs (previously planned to end in September) through at least the end of the year.  At the same time, Senate Majority Leader McConnell was telling the press what he refuses to negotiate with Democrats and other Republican Senators were saying they oppose the GOP plan.  Not to be outdone, Senate Minority Leader Schumer was attacking the Republican plan from the opposite direction.

Last evening, V reported sharply lower revenue and earnings.  The company said that even as the country was reopening in June, they saw spending using their cards down 10% during the month (which was actually an estimate beat).  BBY also announced that they will join the bandwagon of companies that will not open Thanksgiving Day.

In the US, the virus numbers show we have 4,498,475 confirmed cases and 152,343 deaths.  With new cases came in at 64,729 Tuesday and deaths more than doubled day-to-day to 1,245. FL and NC both reported a record number of virus hospitalizations Tuesday.  However, FL also reported a bit less than their 7-day average of new cases. Outbreak fears seem to have shifted from the sunbelt to the IN, OH, KY, and TN area.

Globally, the number of cases has reached 16,923,001 confirmed cases and 664,191 deaths.  UK PM Johnson warned of a second wave in Europe.  This came as the UK and Germany both toughened their travel restrictions for Spain based on an outbreak in the Barcelona region.  This came as the Spanish PM warned tougher measures will be needed unless the spread is broken in the next 10 days. In Asia, the Vietnamese PM said every city and province in his country is now at high risk for infection and that they will institute strict lockdowns.  Hong Kong Chief Executive Lam said the city was on the verge of a crippling outbreak as well.

Overnight, Asian markets were mixed yet again, with Japan and India significantly lower, but China strongly higher.  The rest of the national bourses were mixed and closer to flat.  In Europe, a similar scene is taking place with the only significant moves being France to the upside and Italy to the downside so far on Wednesday.  In the US, as of 7:30 am futures are pointing to a flat to mildly green open. 

The major economic news for Wednesday includes June Trade Balance and June Retail Inventories (both at 8:30 am), June Pending Home Sales (10 am), Crude Oil Inventories (10:30 am), FOMC Statement and Rate Decision (2 pm), and the FOMC Press Conf. (2:30 pm).  Major earnings include AAN, AER, ANTM, ADP, AXTA, BA, BSX, BCO, BG, CLS, GIB, CME, ENB, EPB, ETN, ETR, GD, GE, GM, HES, IPG, MGLN, MKL, NSC, OC, PAG, R, SNY, SC, SMG, SPOT, TROW, TEL, and TT all before the open.  Then after the close, ADM, AMP, APA, AR, ASGN, AVTR, CCI, CERN, CTSH, CXO, EQIX, FBHS, FTI, LRCX, PYPL, QCOM, QRVO, NOW, SFM, TPC, URI, and YUMC.

With the FOMC not until afternoon and the government arguing over who gets what money and which politician gets the credit, it looks like earnings will drive any move prior to the Fed. And while the FOMC is not expected to make any policy moves, the market is waiting for either reassurance or a scare from Chair Powell's comments. So, while we will likely see volatility in spots, it would not be unexpected to see drift until 2pm. Also, remember that most Fed moves see a whipsaw 10-15 minutes after the initial move.

Keep an eye on those FAANG stocks as our “canary in the coalmine” and follow the trend. Don’t try to predict reversals, don't chase moves that got away, and always take profits as you go.  Remember, trading is a job and we’re here to consistently make profits, not win the lottery.

Ed

The Daily Swing Trade Ideas for today: NIO, GM, XLU, KR, HOG, YNDX, ZS, IYR, BAC. Trade your plan, take profits along the way, and smart. Also, don't forget to check for upcoming earnings. Finally, remember that the stocks/ETFs we mention and talk about in the trading room are not recommendations to buy or sell.

🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.

🎯 Dick Carp: the scanner paid for the year with HES-thank you

🎯 Arnoldo Bolanos: LTA scanner really works $$, thanks Ed.

🎯 Bob S: LTA is incredible…. I use it … would not trade without it

🎯 Malcolm .: Posted in room 2, @Rick... I used the LTA Scanner to go through hundreds of stocks this weekend and picked out three to trade:  PYPL, TGT, and ZS.   Quality patterns and with my trading, up 24%, 7% and 12%.... this program is gold.

🎯 Friday 6/21/19  (10:09 am) Aaron B: Today, my account is at +190% since January. Thanks, RWO HRC Flash Malcolm Thomas Steve Ed Bob S Bob C Mike P and everyone that contributes every day. I love our job.

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