May 2, 2023

Markets:

Stock futures fell slightly Tuesday as investors prepared for the Federal Reserve’s May policy meeting to kick off.

The Fed’s two-day policy meeting is expected to conclude with the central bank announcing another 25 basis-point rate hike. Per the CME Group’s FedWatch tool, traders are pricing in 97% chance of a rate hike. Investors will be looking for clues on whether the Fed will keep rates steady after this meeting, or if it will further tighten monetary policy to fight inflation.

Weighing on sentiment was word from Treasury that the country may hit the debt ceiling sooner than expected. Treasury Secretary Janet Yellen warned that the U.S. may run out of measures to pay its debts as early as June 1, earlier than the late July deadline Goldman was estimating.

Wall Street will also will watch for data on job openings, factory orders and light vehicle sales on the economic front.

The earnings season rolled on, with Uber and Pfizer reporting better-than-expected results. Uber shares popped nearly 7%, while Pfizer advanced more than 1%. Ford, Starbucks, Advanced Micro Devices and Caesars Entertainment are set to report after the bell.

Portfolio:

We enter the new trading session holding positions in SAGE, EDR, ARRY, and DKNG.  We expect the markets to swing a bit but would be surprised to see them have any type of conviction heading into the Fed meeting that begins today and ends with Powell speech tomorrow.  But, look where we are on the S&P and how close we are to testing 4200.  Would love to see and this week bring the catalysts to do it with the Fed, monster earning report from AAPL, and Jobs number.  Be ready and stay patient this week.  Allow it to all develop.  We are positioned well.