Free Trade Ideas

Welcome to Mid-Week Trade! Wall Street was alive and well as the latest FOMC Minutes hit the newswires. Bidders won the day as fresh optimism over a possible end to the Iran War dominated sentiment. At the closing bell, the DJIA (+1.31%), S&P 500 (+1.08%), and NASDAQ (+1.66%) all posted bullish trend days.
Several key news events headlined the Wednesday session. First, the FOMC Minutes showed a deepening divide among Committee members. April’s Fed Meeting featured four “no” votes, meaning that a move was suggested from the 3.5% to 3.75% prime rate. This was the largest number of “no” votes since 1992, and a signal that new Fed Chairman Kevin Warsh will inherit a divided FOMC next month.
Here are a few of the key statements from today’s FOMC Minutes:
“A majority of participants highlighted, however, that some policy firming would likely become appropriate if inflation were to continue to run persistently above 2 percent.”
“Many participants indicated that they would have preferred removing the language from the post-meeting statement that suggested an easing bias regarding the likely direction of the Committee’s future interest rate decisions.”
“The vast majority of participants noted an increased risk that inflation would take longer to return to the Committee’s 2 percent objective than they had previously expected.” Add it all up: policymakers are concerned about rising inflation due to the energy spike brought on by the Iran War. This will be the Fed’s stance moving forward, and already has the market pricing a 50% chance of at least one 25 bps rate hike by the end of 2026. Until the Iran War ends, “hawkish” is likely the best way to describe Fed policy.
The second big story of the day came by way of NVIDIA earnings. The latest report showed a topline beat of $1.87 EPS vs $1.76 estimated. Total revenue looked good as well, with NVIDIA posting $81.62 billion vs $78.86 billion estimated. In addition, NVIDIA announced an $80 billion buyback program and that dividends were to be increased. NVDA shares held firm after the release, but expect fireworks on tomorrow’s open.
That’s all for now. We’ll see at tomorrow’s Switch Markets Live Webinar: The 9/20 EMA Crossover Strategy! (13:00 GMT, https://youtu.be/L5pteTNDFm8)