Sunday, July 26, 2015

Sunday Night Futures

by Bill McBride on 7/26/2015 07:49:00 PM

From Ben Leubsdorf and Jon Hilsenrath at the WSJ: Fed Officials May Offer More Clarity on Rates

Federal Reserve officials are likely to emerge from their policy meeting Wednesday with short-term interest rates still pinned near zero, though they could send fresh hints that they’re getting closer to raising rates. ...

This leaves the Fed with a slight signaling challenge at the meeting this week. How aggressively should officials tip their hands about the timing of a rate increase later this year? Fed officials don’t want to take financial markets by surprise by raising the benchmark federal-funds rate for the first time since 2006 with no forewarning. At the same time, they want to keep their options open so they can adjust their stance as the economy evolves.
CR Note: I don't expect an explicit signal at the FOMC meeting this week, instead I expect the FOMC to emphasize that they are data dependent - and that they would like to see further improvement in the labor market, and further evidence of inflation moving back towards 2%.

The September meeting could be interesting!

Schedule for Week of July 26, 2015

• At 8:30 AM, Durable Goods Orders for June from the Census Bureau. The consensus is for a 3.1% increase in durable goods orders.

• At 10:30 AM, Dallas Fed Manufacturing Survey for July.

From CNBC: Pre-Market Data and Bloomberg futures: currently S&P futures are up slightly and DOW futures are up 20 (fair value).

Oil prices were down over the last week with WTI futures at $48.04 per barrel and Brent at $54.62 per barrel.  A year ago, WTI was at $103, and Brent was at $106 - so prices are down about 50% year-over-year.

Here is a graph from for nationwide gasoline prices. Nationally prices are at $2.71 per gallon (down about $0.80 per gallon from a year ago).