December 11, 2023

Markets:

U.S. stock futures were little changed Monday as investors awaited this week’s final Federal Reserve meeting of 2023 for any signals on when central bankers will begin to cut interest rates.

Macy’s shares rallied 18% in the premarket on news the retailer has received a buyout offer for $5.8 billion.

The Fed is expected to maintain the fed funds rate steady in the 5.25%-5.5% range. Chair Jerome Powell is also expected to reiterate his commitment to lowering inflation in his press conference on Wednesday. Already, the CME Group’s FedWatch tool is indicating that markets are pricing in a 45% likelihood in March that the Fed will lower rates by 0.25 percentage points.

Investors are also looking ahead to key inflation data, which could impact market movements and rate-cut decisions made by the Fed. The November consumer price index is due out on Tuesday, while the producer price index is set for release on Wednesday.

On the earnings front, Oracle will report on Monday, while Adobe will post on Wednesday and big-box retailer Costco Wholesale on Thursday.

Portfolio:

It’s Fed week but we don’t expect anything to change here from a technical perspective. It would have to be an entire shift in language from the last update we received and that would not be supported based on recent data. The surprising part to us, they took it to 4600 on the S&P and held it thus far. This could be an absolute monster for us to end 2023 and welcome in 2024. Our path is there, and the real pain trade could just be getting started. The chase for performance could be epic to end 2023. Would love to see this continue to build and play out. More opportunity with that runway than to the downside right now.

We enter this monster week with set-ups in CVNA, BYND, U, AI, and IONQ. AI by the way provided that monster turn we wanted. Looks really good to run into month end. Be ready this week. Queue continues to ignite, expect a few swings today. Be on alert!