Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Next Market Breakout Awaits Fed Decision

Published 05/23/2016, 10:05 PM
Updated 07/09/2023, 06:31 AM

Tuesday, May 24, 2016

Stocks are modestly up this morning, but lack conviction given the Fed uncertainty. The New Home sales report coming out a little later is the only notable economic reading today on an otherwise light data calendar.

The market is totally consumed with the Fed question: Will it announce a rate hike at next month’s meeting or delay it further? The odds have steadily gone up since minutes of the last Fed minute came out, which indicated that the market was behind the curve in reading the central bank’s intentions.

The Fed’s next steps are contingent on how the economic picture evolves in the coming days, particularly the next monthly jobs reading that comes out at the end of next week. But even on that count, many suspect that the Fed many not actually need to see a 200K-plus jobs tally to get comfortable about the economy; it could be OK with what we saw last month when the jobs report showed only a 160K tally. It is these growing rate-hike odds that have been weighing on the market lately, a trend that will likely continue in the coming days.

In corporate news, the parade of weak retail sector earnings reports continued this morning with weak results from Best Buy (NYSE:BBY) and AutoZone (NYSE:AZO) . The Best Buy report actually came ahead of estimates, though guidance was on the weak side, while AutoZone blamed weather for its weaker-than-expected quarterly results. Best Buy shares are taking a hit today, but they have done reasonably well lately and performed better than the S&P 500 in the year-to-date period on the back of a steadily improving operating outlook.

Sheraz Mian
Director of Research

Note: In addition to this daily pre-open article about the market, economy, and the corporate earnings picture, Sheraz Mian also provides detailed earnings analysis in his weekly Earnings Trends and Earnings Preview reports. If you want an email notification each time Sheraz Mian publishes a new article, please click here.



AUTOZONE INC (AZO): Free Stock Analysis Report

BEST BUY (BBY): Free Stock Analysis Report

Original post

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.