Wednesday Morning Rebel Brief — FOMC Day is Here

Market Rebellion

This article was last updated on 09/21/2022.

CPI Data

FOMC

After a rough week of trading, the indices are higher this morning ahead of an important FOMC decision.

Fed to Potentially Announce Biggest Rate Hike in 28 Years

It’s the big day: the FOMC meeting. The Fed will give its forecast on future rate hikes, GDP, inflation, and more. The Fed will likely comment (as it has in many prior meetings) on the likelihood of a US recession. Additionally, many expect the Fed to raise benchmark borrowing rates by 75 basis points — which would be the largest in 28 years. 

As we’ve covered during prior FOMC meetings, when the Fed starts talking, the market starts moving — hard. Regardless of which direction the market takes, it’s likely to be a very tradeable moment, and it’s one that we at Market Rebellion will be sure to report on later today. 

The FOMC decision will be released at 2PM EST, and Jerome Powell will speak at 2:30PM. 

Stellantis and Baidu Rise, MicroStrategy and Robinhood Fall

Shares of Baidu (BIDU) are up more than 3% this morning on news that the Chinese search engine is planning to sell its stake in iQIYI (IQ). Many Chinese stocks are rallying in sympathy with Baidu this morning as well.

Shares of Stellantis (STLA), the automaker behind Fiat Chrysler, are trading higher by more than 2% higher after announcing that it plans to lay off employees at its Sterling Heights plant. This news sounds grim, but would likely be an effective cost-cutting measure.

Shares of MicroStrategy (MSTR) continue to fall today, trading lower by as much as 3.1% in this morning’s premarket. This is despite the firm announcing that it has not received a market call against the bitcoin-backed loan supplied by Silvergate Capital. 

Shares of Robinhood (HOOD) fell as much as 3% in early morning trading on news of a downgrade from Atlantic Equities.

White House Finally Acknowledges Stock Market Pain

On Monday night, White House press secretary Karine Jean-Pierre was asked, 

“President Biden once bragged about the stock market hitting ‘record after record after record on my watch,’ How about now?” 

This was in reference to this speech made back in September of 2021.

“There have been so many records the stock market has hit under my presidency.”

Fast forward to 2022, and we’re now talking about a different set of records. 40-year record-high inflation. Record high average gas prices. S&P’s worst start to the year since 1939.

In response to a previous question about poor stock performance posed last month, on May 18th, Jean-Pierre said,

“That’s not something we keep an eye on every day, so I’m not gonna comment on that from here.”

However, it looks like that “laissez-faire” attitude on the market has shifted this week.

“As you know, we are watching closely”

Jean-Pierre answered, before blaming things like “Putin’s price hike”, and the pandemic. 

The question now that the white house is “watching closely”, will anything change? What can President Biden do to set the market back on a path towards normalcy? Is there any action that he can take, or is this all just political rhetoric ahead of an important midterm election?

For more quick takes on this morning’s market-moving news, check out 60 Seconds With Jon Najarian!

https://twitter.com/jonnajarian/status/1537045293987946501?s=20&t=DTKBDL6SA2rONtn7RtWKcQ

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