Trades continued to show quiet confidence in stocks today with the Dow and SPX both reaching new all-time highs on 0.2% gains, a sign of steady accumulation without fatigue. Stocks took President Trump’s speech to the UN (which had some sound bite fireworks like threatening to totally destroy North Korea but otherwise no major surprises), in stride as traders turned their sights to Wednesday’s FOMC meeting.
The two day FOMC meeting started today with the decision due tomorrow afternoon. The Fed is widely expected to announce the start and timetable for its balance sheet reduction program. Traders may also look to the statement, member projections and press conference for hints as to whether A December interest rate hike is still on the table. The Fed’s party line has been for three hikes this year and they have done two so far. Recent overtures and deals between the White House and the Democrats suggest that the political window for the Fed to act may remain open through the end of the year. The USD has been sinking in recent weeks suggesting the street is expecting a dovish Fed so any hawkish signs could spark a rally in the greenback.
It was a mixed day for WTI crude oil which took an early run at $50.00, slumped back midday then caught fire again in the later afternoon. API inventories rose by 1.4 mmbbls which is less than what the street is expecting for DOE tomorrow. Gasoline inventories fell by 5.0 mmbbls. With traders starting to look past the hurricane effect, oil may remain active though tomorrow’s DOE reports.
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