Wall Street Brunch: Fed And Hyperscaler Earnings
Download this episode onApple Podcasts/Spotifyor listen below: What will be theFOMC’s next move? (0:17)Microsoft, Alphabet and Amazon earnings put AI spending under scrutiny.
(1:30)JetBlue creditors organizeamid rising fuel costs.
(3:03) It’s Fed week again, and expectations have swung wildly heading into this meeting.
The FOMC’s decision comes Wednesday, as usual, with Chairman Kevin Warsh speaking afterward.
There will be no dot plot update this time around.
Markets now firmly price in no move, with the fed funds rate staying at 3.75%-4% after a quarter-point hike last month.
There’s just a 10% chance the Fed hikes again, according to fed funds futures.
Wells Fargo economists say “the meeting itself probably will be on the quieter side.†“We suspect the Chair will channel his inner Greenspan and strive to mumble with great incoherence in the press conference,†they add.
“We see no reason to think Warsh will offer much in the way of forward guidance about what is coming next.†If he has “a lean,†it will be hawkish given hot inflation data and the high likelihood that the Fed hikes rates in December.
SA analyst Damir Tokicsays the next Fed move will be a cut, and there’s a small chance it could come as soon as Wednesday.
His big reason? The AI bubble is bursting, in his view, so focus has to shift to financial stability, and then to a recession.
While he says the odds are still for no move, we are in a period similar to early 2008 when oil was rising, but the early signs of the financial crisis forced dovish moves.
| Product | Price | Change |
|---|---|---|
| Brent Crude | $102.14/bbl | +0.34% |
| WTI Crude | $96.90/bbl | +0.21% |
| EN590 Diesel | $846/MT | +0.18% |
| Jet Fuel A-1 | $1090/MT | +0.55% |
| Mazut M100 | $450/MT | -0.15% |
| Bitumen 60/70 | $470/MT | +0.08% |
| Sulphur Gran 99.5% | $470/MT | -0.44% |
| Urea 46% Gran | $650/MT | +1.12% |
| NPK 16-16-16 | $460/MT | -0.28% |
| Nat Gas TTF | $15.42/MMBtu | +0.92% |
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