December 18, 2024

Markets:

U.S. stock futures were higher on Wednesday morning as traders looked ahead to the Federal Reserve’s December interest rate decision.

The Dow’s worst funk in 46 years was mostly caused by a rotation out of old economy shares and into technology stocks, a sector that the century-old measure underweights compared to broader market metrics. Despite the streak, the Dow sits less than 4% from an-all time high. Other measures of the market are holding up this month, with the S&P 500 in the green for December and sitting about 1% from an all-time high. The Nasdaq is up 4.6% this month as investors flooded into to tech shares, while shunning the Dow.

The Fed’s policy decision is due at 2:00 p.m. ET. Fed funds futures trading currently shows a 95% chance that the central bank will cut interest rates by a quarter percentage point, according to the CME FedWatch tool.

Investors will also be paying close attention to Fed policymakers’ Summary of Economic Projections and Fed Chair Jerome Powell’s press conference, seeking clues about what might happen in the months ahead. The central bank is widely expected to temper expectations of more rate cuts in the approaching year, particularly as inflation remains stubborn.

MU reports after the closing bell today.

Portfolio:

It's Fed Day! Nothing more to overthink here. We follow the same playbook as we always do coming into Fed Day. We wait patiently for it and for his statement along with his Q&A. Front running this never makes sense unless we see an A+ opportunity. Your best set-ups come from after his remarks.

No changes needed with our current holdings in IONQ, SOUN, CIFR, and SOFI.

We expected volatility this week as we stated in Mondays premarket. We have it and this is healthy for the overall move. Welcome it! Use it. Be ready today.