October 7, 2019

TRADE TALKS, FOMC/POWELL TALK, AND TRUMP TWEETS. WILL WE HAVE A WILD WEEK OF TRADING?

Hi everyone –

We finished the week strong as the markets gained throughout the day into the close. The broad markets have rallied back strong after the selloff earlier this week, thanks to the worst ISM data since the financial crisis.  The bounce was led by growth tech names (cloud notably) along with AAPL making a strong move in recent days. Consumer Staple giants such as WMT, TGT, and PEP all made strong moves or reversals off lows. If these stocks continue their ascension, we should see the broad markets also follow suit.  



Trade talks are set to resume at the end of this week as the Chinese Vice Premier Liu is set to visit on Oct. 10-11 in Washington. We could see a lot of volatility if traders are trying to position themselves ahead of the potential news/fallout. We could also see a very quiet week of trading as cash may sit on the sidelines waiting on developments. I suspect we may see moves earlier in the week and have a quiet finish into the weekend. If any positive developments occur during the meeting such as a promise to not hike tariffs etc, we could see a very positive reaction. Otherwise, expect traders to wait on the news first.  As with Jerome Powell speaking several times this week along with the FOMC Minutes release, we could see a strong reaction based on the Fed’s stance regarding further rate cuts. Chairman Powell may give further guidance on potential cuts or lack thereof.    

Notable events this week are:

Federal Reserve Chair Powell Speaking 12 PM CST 10/7

Federal Reserve Chair Powell Speaking 12:50 PM CST

10/8 Housing Starts 7:15 AM CST

10/9 JOLTS 9 AM CST

JPM (JPMorgan Chase) starts the parade on October 15th. Enjoy your Football Sunday and see you all tomorrow. Best of trading everyone! 

about the author:

Scott Bauer

A respected market commentator seen on Bloomberg, Fox Business, CNBC and other major financial networks, Scott Bauer has 25 plus years of professional equity and index options experience at the Chicago Board Options Exchange (CBOE) and Chicago Mercantile Exchange (CME) and as a Vice-President/trader for Goldman Sachs. Scott graduated with Honors from the University of Illinois Business School and has taught classes both at his alma mater and at the CBOE.

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