S&P 500 (SPY) Report – 05/01/23
Good morning traders!
The S&P 500 ($SPY) is trading below yesterday’s close. Let’s get into it…
This week, the Federal Open Market Committee (FOMC), a board that manages monetary policy, will meet on May 2-3. Experts predict that they will raise interest rates by another quarter point. Federal Reserve Bank of Atlanta President Raphael Bostic said that after one more move, they will assess how their policy affects the economy and check if inflation is returning to their target. Bostic added that inflation is still too high, and there’s more work to be done. Currently, the federal funds rate is 4.75% to 5.00%.
In the news, JPMorgan Chase buying First Republic Bank is both good and bad news for the Federal Reserve, who will make an interest-rate decision this week. It’s good because it could prevent a banking crisis, but bad because the First Republic’s failure is a symptom of the pressure caused by the Fed’s interest-rate increases. Inflation is also a problem, and recession is a possibility. Milton Friedman’s warning that the lags in monetary policy can be long and variable is proving to be true. There will likely be more challenges ahead.
Trade Ideas:
It is recommended that traders exercise caution this week due to the FOMC meeting and expected rate decision, which may result in significant market volatility. It’s important to wait for confirmation and avoid making impulsive trades.
Monday Economic Events:
PMI Manufacturing Final 9:45am ET
ISM Manufacturing Index 10:00am ET – High Volatility Expected
Construction Spending 10:00am ET
Fed Speaker Scheduled:
No Fed Speakers Scheduled
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