June 14, 2023

Markets:

S&P 500 futures traded higher Wednesday as investors looked ahead to the Federal Reserve’s policy decision and subsequent press conference slated for the afternoon.

Aside from the Fed’s policy announcement, investors are preparing for Chair Jerome Powell’s remarks to the media, where he may give insight into the state of the economy and the central bank’s path forward.

Markets see a 90% chance that the central bank will keep rates at the current target of 5% to 5.25%, according to CME Group’s FedWatch tool. This would be a reprieve from rate hikes following a streak of 10 straight increases.

May’s producer price index, an indicator of the path of inflation, is due on Wednesday morning. Economists polled by Dow Jones anticipate a decline of 0.1%. On Tuesday, May’s reading of the consumer price index, which showed the lowest annual increase in more than two years, bolstered investor hopes that the Fed will not raise interest rates.

After a choppy start, European stock markets moved higher through the first hour of trade.

Portfolio:

The pain trade is on! Few will want to believe this in the beginning, but we kept stating what would develop should we cross 4200 and hold it and now 4350. The chase will only get greater as this develops and as shorts are forced to cover even more. We started seeing monster blocks for upside calls coming in to end the year now. First time in over a year we saw such moves. The opportunity in front of us, especially with an election year coming, is an absolute monster one. Really happy our community read this well and enjoyed this monster start. We're just getting started.

We enter Fed Day holding set-ups in DKNG, ARLO, APLD, and PATH. Queue continues to ignite, and we love to see this. Today we will want to be a bit more patient and allow the Fed their time and see how the market responds. We don't expect anything that would shift sentiment, but we want to be patient and allow it to develop. Be ready!