November 1, 2023

Markets:

Stock futures were little changed Wednesday as Wall Street braced for the Federal Reserve’s latest policy decision on interest rates after closing out a terrible month.

Futures came off their lows after the Treasury detailed plans of the size of its future bond sales as concern grows about the U.S. government’s booming debt load. It appeared to be in-line with what traders were expecting. For example, Treasury will auction $112 billion in debt next week, matching largely what Wall Street was expecting.

Private sector payrolls in October came in weaker than expected, the ADP said Wednesday. Companies added 113,000 workers last month, lower than the 130,000 anticipated by economists polled by Dow Jones.

Those moves come as traders turn their eyes to Washington for the Fed’s latest policy announcement. Central bankers are largely expected to maintain rates steady, with fed funds futures pricing suggests a more than 99% probability that rates will remain at current levels, according to the CME FedWatch Tool.

The decision is slated for release at 2 p.m. ET, followed by a news conference with Chair Jerome Powell at 2:30 p.m. ET.

Portfolio:

It's the Federal Reserve meeting day! Today, we approach this crucial session with positions in SOXL, CAVA, GEO, and AX. Our strategy is to maintain a balanced stance, and we anticipate a relatively subdued market until 2 pm. It's essential to keep in mind that historically, the initial market reaction to the release often proves to be incorrect. So, we advise allowing the market some time to digest the information and waiting for the final hour, or sometimes it's even prudent to wait until tomorrow morning to make adjustments. However, we remain vigilant for opportunities that may arise from this event.

Yesterday was characterized by a lack of trading activity, with the market appearing somewhat robotic, and volumes were notably low. It seems like most participants are currently in a holding pattern, awaiting the Federal Reserve's announcement and closely monitoring Fed Chair Powell's address and comments for insights into the future of interest rate hikes and their economic outlook.

Once we navigate through this pivotal event and receive AAPL's earnings report, we can proceed confidently, as the new trading cycle will begin to take shape. Let's make the most of the remainder of 2023 and aim for a highly profitable trading cycle!