{"id":61855,"date":"2022-06-15T09:01:15","date_gmt":"2022-06-15T13:01:15","guid":{"rendered":"https:\/\/blog.t3live.com\/?p=61855"},"modified":"2022-06-15T09:01:49","modified_gmt":"2022-06-15T13:01:49","slug":"coffee-with-greta-stocks-bounce-on-fed-decision-day","status":"publish","type":"post","link":"https:\/\/blog.t3live.com\/2022\/06\/15\/coffee-with-greta-stocks-bounce-on-fed-decision-day\/","title":{"rendered":"Coffee With Greta: Stocks Bounce on Fed Decision Day"},"content":{"rendered":"

Editor's Note:<\/strong> Coffee With Greta is a FREE morning update from our newest contributor Greta Wall. Want to get it by email every day? Click here<\/span><\/a><\/strong>.<\/p>\n

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DJIA Futures: <\/b>+191 (+0.6%)<\/span><\/p>\n

SPX Futures: <\/b>+31 (+0.8%)<\/span><\/p>\n

NASDAQ Futures: <\/b>+115 (+1%)<\/span><\/p>\n

Good morning friends!<\/span><\/p>\n

Futures are rising as traders brace for a big Fed rate hike.<\/span><\/p>\n

Let\u2019s get right to it!<\/span><\/p>\n

Fed Decision Day<\/strong><\/h2>\n

The Federal Reserve releases its rate hike decision at 2:00 p.m. ET today with Chair Jerome Powell\u2019s press conference at 2:30 p.m. ET.<\/span><\/p>\n

CME Group\u2019s <\/span>FedWatch<\/span><\/a> Tool shows the market sees a 98.6% chance the Central Bank will raise the federal funds rate by 0.75%.<\/span><\/p>\n

Traders ramped up those expectations after the May CPI and PPI both came in hot.<\/span><\/p>\n

It would be the biggest hike in 28 years, as inflation stands at a more than 40-year high.\u00a0<\/span><\/p>\n

Analysts expect a steep sell-off if the Fed sticks with a 50 basis point hike instead as the bank appears to be way behind on inflation.<\/span><\/p>\n

The bank is also expected to adjust its future outlook for more aggressive hikes.<\/span><\/p>\n

Economists expect the Fed to lower its GDP forecast and raise its forecast for inflation and unemployment.\u00a0<\/span><\/p>\n

Retail Sales Drop\u00a0<\/strong><\/h2>\n

U.S. retail sales fell for the first time in five months in May as inflation squeezes consumer spending.\u00a0<\/span><\/p>\n

The Commerce Department reported retail sales fell 0.3% last month to $672.9 billion.<\/span><\/p>\n

That missed economists\u2019 expectations for a 0.1% increase.<\/span><\/p>\n

Gasoline sales surged 43.2% compared to a year ago as gas prices began their record-breaking climb in May.<\/p>\n

The monthly drop in overall retail sales was mostly due to a decline in auto purchases.<\/span><\/p>\n

Excluding autos and gasoline, so-called core retail sales rose 0.1%.<\/span><\/p>\n

But that was lower than expectations for a 0.8% increase.\u00a0<\/span><\/p>\n

And when adjusted for inflation, real retail sales tumbled more than 1%.<\/span><\/p>\n

Crypto Collapse Continues<\/strong><\/h2>\n

The meltdown in the crypto market is continuing.\u00a0<\/span><\/p>\n

Bitcoin is down 4.6% in the past 24 hours at just over $21,000 while Ethereum is 7.6% lower at $1,100.<\/span><\/p>\n

Bitcoin hit a low of around $20,200 earlier in the morning.\u00a0<\/span><\/p>\n

The coin is down more than 70% from its all-time high in November.\u00a0<\/span><\/p>\n

Coinbase <\/b>(COIN) shares are sliding 1.9% ahead of the open.<\/span><\/p>\n

Gas Prices Slip from Record-High<\/strong><\/h2>\n

U.S. gas prices took a break from their record-breaking climb today.<\/span><\/p>\n

AAA<\/span><\/a> shows the national average for regular gas dipped back to $5.014\/gal today, down from $5.016\/gal on Tuesday.\u00a0<\/span><\/p>\n

That price is still 54 cents higher than a month ago and $1.938 higher than a year ago.<\/span><\/p>\n

But diesel prices did not follow suit.\u00a0<\/span><\/p>\n

The national average for diesel jumped to $5.780\/gal today from $5.775 on Tuesday.\u00a0<\/span><\/p>\n

Oil Prices Fall Ahead of Fed Rate Hike<\/strong><\/h2>\n

Oil prices are slipping amid fears of an economic slowdown ahead of the Fed rate hike.<\/span><\/p>\n

West Texas Intermediate crude futures are down 0.4% at $118 bbl while Brent crude futures are falling 0.2% to $121 bbl.\u00a0<\/span><\/p>\n

The American Petroleum Institute reported late Tuesday that U.S. crude inventories rose by 736,000 barrels last week while gasoline stockpiles fell by 2.2 million barrels.<\/span><\/p>\n

The Energy Information Administration reports official inventory levels today.\u00a0<\/span><\/p>\n

Analysts expect the EIA to report a 1.1 million barrel decline in crude inventories and a 100,000 barrel increase in gas inventories.<\/span><\/p>\n

Mortgage Demand Rebounds, Rates Soar<\/strong><\/h2>\n

Mortgage demand rose slightly last week but is still down sharply compared to a year ago.<\/span><\/p>\n

The Mortgage Bankers Association reports new purchase applications rose 8% weekly but were down 16% year-over-year.\u00a0<\/span><\/p>\n

Refinance applications were up 4% weekly and plunged 76% annually.\u00a0<\/span><\/p>\n

Overall application volume was down 52.7% compared to a year ago.\u00a0<\/span><\/p>\n

The average 30-year contract rate rose to 5.65% last week from 5.40% the week before.<\/span><\/p>\n

But that rate has since skyrocketed.\u00a0<\/span><\/p>\n

Mortgage News Daily shows the average 30-year rate rose 10 basis points on Tuesday alone, to 6.28%.\u00a0<\/span><\/p>\n

That jump came after a 33 basis point increase on Monday.<\/span><\/p>\n

It\u2019s the first time mortgage rates have been above 6% since 2008.<\/span><\/p>\n

Homebuilder Sentiment Expected To Fall<\/strong><\/h2>\n

The National Association of Homebuilders releases its June sentiment index at 10:00 a.m. ET.\u00a0<\/span><\/p>\n

That survey is expected to fall to 67 from the 2-year low of 69 in May.<\/span><\/p>\n

The index measures sentiment about current market conditions, buyer traffic, and expectations for 6-months from now.\u00a0<\/span><\/p>\n

It would be the fifth straight month of declining sentiment as builders struggle with ongoing supply chain issues, a labor shortage, and now rising mortgage rates.\u00a0<\/span><\/p>\n

In Case You Missed It<\/strong><\/h2>\n