Stocks moved sideways in an uneventful week of trading… that is unless you were trading IPOs… which were red-hot thanks to debuts from Chewy, Fiverr, and Crowdstrike.

I’ll be looking forward to trading these stocks when options get issued on them in the coming weeks.

That said, I’m really focusing in on the upcoming FOMC meeting (Wednesday, June 19).

The S&P 500 rose by 4.4% last week. And that’s because the market started pricing in a Fed rate cut.

Some weak economic numbers last Friday, and fears of a trade war had everyone believing that the Fed will cut interest rates multiple times this year…

….well not everyone…

You see, Goldman Sachs came out on Monday and said they don’t believe the Fed will cut at all in 2019.

UBS came out a few days later with the same analysis as Goldman.

 

(I’ve been prepping for the Fed meeting for weeks now)

 

That said, the Fed Funds futures were implying an 88% chance that the Fed will cut interest rates by 25 basis points at its July meeting.

In addition, the Fed Funds futures were implying an 18% chance that the Fed cuts rates at its upcoming meeting on Wednesday.

However, it’s the Fed comments and Fed Chair press conference that traders will be locked in on.

Did the stock market get too ahead of itself last week?

We’ll find out soon enough. And if you’re wondering why I’m so fascinated by this, it’s because the Fed controls the way money moves around…

…their ability to massage interest rates makes them the most powerful group on Wall Street.

 

(I straight up disrespect these markets around Fed events..If you want my real-time trade alerts and a live-stream of my portfolio before the next FOMC meeting then click here to find out how to join WMM now)

That said, this week’s Jump digs deeper into this week’s FOMC meeting, economic and corporate events, IPOs, as well as, trade ideas I have…

 

Jump on the Week – Fed Edition

 

All eyes are on the Federal Open Market Committee.

Will they cut rates, if so, when and how many times?

We’ll just have to wait and see.

Now, the S&P 500 still closed the week up about 0.5% last week, as consumer discretionary stocks caught a pop, as the market is hopeful of the Fed announcing multiple rate cuts this year. Traders are already pricing in an 86.4% chance of a rate cut in July.

 

 

Right now, the markets are focused on the macros, as there are hopes that the G-20 summit later this month can improve U.S. – China trade talks…

… and you might think the markets could run higher from these levels.

However, the SPDR S&P 500 ETF (SPY) has been trading in range the last few days… and struggling to find a clear direction.

 

 

That said, I think if the FOMC doesn’t give a lot of clues as to where they think interest rates are headed… and if U.S. and China remain at a standstill at the G-20 summit… we could be in for a “boring” period.

You see, we just saw the market sell off for a few weeks… followed by a massive rally… and if you look at the hourly chart above, you can see the market just hit a wall… and there could be a lot of back-and-forth action.

However, even if the markets are going to be range-bound and dull… I’m okay with that because I have a strategy for this market condition… on the flip side, if stocks start crashing or breaking out, I’ll be okay with that too.

For example, with the recent rally, followed by range-bound trading last week, I still was able to knock down a +400% winner in Alibaba (BABA).

 

(Think alerts to trades like these can boost your PnL? Click here to get started.)

 

Like the Fed, I’m in wait-and-see mode right now.

That said, let’s take a look at the economic calendar and a look into the FOMC meeting, as well as the earnings and IPO calendar.

We’ve still got a few important indicators on the economic front, but the Fed meeting will overshadow those.

 

Economic Calendar

 

Monday, June 17, 2019

 

  • Empire State Manufacturing Survey at 8:30 AM ET.
  • Housing Market Index at 10:00 AM ET.
  • Treasury International Capital at 4:00 PM ET.

 

Tuesday, June 18, 2019

  • FOMC Meeting commences.
  • Housing starts at 8:30 AM ET.

 

Wednesday, June 19, 2019

  • EIA Petroleum Status Report at 10:30 AM ET.
  • FOMC Meeting Announcement at 2:00 PM ET.
  • FOMC Forecasts at 2:00 PM ET.
  • Fed Chair Press Conference at 2:30 PM ET.

 

Thursday, June 20, 2019

  • Jobless Claims at 8:30 AM ET.
  • Philadelphia Fed Business Outlook Survey at 8:30 AM ET.
  • EIA Natural Gas Report at 10:30 AM ET.
  • Fed Balance Sheet at 4:30 PM ET.

 

Friday, June 21, 2019.

  • Existing Home Sales at 10:00 AM ET.
  • Quadruple Witching – stock index futures, stock index options, stock options, and single stock futures expire… things could get a little wild the last 15 minutes of the trading day.

 

With all eyes on the FOMC, we’re going to do a quick preview of what to look for.

 

FOMC Preview

 

The FOMC meeting is going to be very interesting because its in a very tough spot… just like the markets.

Now, the Fed probably isn’t going to say it’s cutting rates… but there will be some clues in the language, which traders will be looking very closely for.

We’ve already seen the Fed use the word “patient” so many times before… and traders will be listening closely as to whether they use that again… or change how they’re going to be looking at inflation.

However, we don’t know with the Fed until we see it.

A rate cut isn’t impossible… but it’s just not like the Fed to cut rates after some weak data… they’ll most likely wait for the G20 meeting and other economic indicators to come out before they make a move.

You see, once the G20 meeting is over… the FOMC could get a better idea of how the U.S. – China trade war can affect the global economy and inflation.

You might be thinking, If the Fed doesn’t raise rates at this meeting, why should I care?

Well, there will be clues as to what the Fed could do in the meeting… they could hint at a rate cut, or leave them unchanged. However, I don’t think the FOMC will lay all their cards on the table… but I’ll be sure to listen to the meeting closely on Wednesday.

Now, we’ve got a very light earnings calendar for the week… but there are a few names I’ll be keeping an eye on. I’ll also be watching the iShares 20+ Year Treasury Bond ETF (TLT), and some gold-related ETFs and stocks.

Earnings Calendar

 

Monday, June 17, 2019

  • No notable earnings.

 

Tuesday, June 18, 2019

 

Earnings Before Open

  • Parsons Corporation (PSN) implying 6.51% move (monthly contracts expiring June 21, 2019)

 

Earnings After Close

  • Adobe Inc. (ADBE) implying a 4.84% move. Historical average move 4.69%.
  • Jabil Circuit (JBL) implying 6.86% move. Historical average move 7.6%.
  • La-Z-Boy Inc. (LZB) implying 7.77% move (monthly contracts expiring June 21). Historical average move 14.72%.

 

Wednesday, June 19, 2019

 

Earnings Before Open

  • Winnebago Industries (WGO) implying 9.89% move. Historical average move 12.4% move.
  • Barnes & Noble (BKS) implying a 5.10% move (monthly contracts expiring June 21). Historical average move 11.68%.

 

Earnings After Close

  • American Outdoor Brands (AOBC) implying a 11.42% move. Historical average move 18.92%.
  • Oracle Corp. (ORCL) implying 4.88% move. Historical average move 7.29%.

 

Thursday, June 20, 2019

 

Earnings Before Open16

  • Darden Restaurants (DRI) implying 5.79% move (monthly contracts expiring June 21). Historical average move 7.68% move.
  • Kroger (KR) implying 8.37% move. Historical average move 12.18%.

 

Earnings After Close

  • Canopy Growth Corp. (CGC) implying 8.96% move.
  • Red Hat Inc. (RHT) implying 1.22% move. Historical average move 7.28%.

 

Friday, June 21, 2019

 

Earnings Before Open

  • Carmax Inc (KMX) implying 8.28% move. Historical average move 8.04% move.

 

IPO Watch

Last week, we saw some IPOs live up to their hype. First, CrwodStrike Holdings (CRWD) opened at $63.50 and priced its IPO at $34. Fiverr International (FVRR) priced at $21 and hit a high of $44.25 during its debut.

This week we’ve got a few IPOs on the docket.

  • Stoke Therapeutics (STOK) expected 6.7M share IPO at a price between $14 – $16.
  • Grocery Outlet (GO) expected 17.2M share IPO at a price between $15 – $17.
  • Slack Technologies (WORK) expected 118.4M share IPO.
  • Personalis (PSNL) expected 6.66M share IPO at a price between $14 – $16
  • Atreca (BCEL) expected 7.4M share IPO at a price between $16 – $18.
  • Dermavant Sciences (DRMT) expected 7.7M share IPO at a price between $12 – $14.
  • Prevail Therapeutics (PRVL) expected 7.4M share IPO at a price between $16 – $18.
  • Akero Therapeutics (AKRO) expected 5M share IPO at a price between $14 – $16.

For the most part, I’m going to stay focused on the macro and the Fed… but I’ll still be looking for stock specific plays. If you want to get my thoughts on the market and what I’m watching this week… click here to get started.