Probability the Fed Hikes by 50bps in March | Morning Express | 2/23/2023

Bill Baruch is joining the CNBC Halftime Report today at 11:00 am CT, for the hour from the floor of the NYSE. Don't miss it!

• FOMC Minutes from the February 1st meeting, released yesterday, did not present anything new.
  • Almost all committee members agreed slowing the pace of rate hikes would allow for proper risk management and the economy to adjust to lag effects.
  • Some members find the current policy insufficiently restrictive and furthermore favored a 50bps hike in January.
  • The economy’s resilience will force a higher than anticipated terminal rate.
  • Very interesting they noted state budget surpluses could lead to rebates which in turn would support consumption. This thought would also apply to other fiscal conversations, NY and CA, that would support the consumer and thus bring a tailwind to inflation.
  • Overall, the committee has a high level of uncertainty about the economy, labor market, and inflation.
• The CME’s FedWatch Tool now shows a 27% probability the Fed hikes by 50bps in March.
• Initial Jobless Claims and the first revision of the Q4 GDP report are due at 7:30 am CT.
• Atlanta Fed President Bostic speaks at 9:50 am CT and San Francisco Fed President Daly at 1:00 pm CT, look for others.
• U.S. 2-year yield taps 4.75% overnight and 10-year high of 3.968% yesterday. The 2s10s is attempting to steepen. We highlighted price levels in yesterday’s Morning Express.
• The U.S. Treasury will auction $35 billion 7-year Notes at noon CT today, after a decent 5-year auction yesterday.
• NVDA reported earnings after the bell yesterday, beating top and bottom-line estimates, the stock is +9% premarket. The numbers were lukewarm. Data Center revenues, 60% of overall revenue, were -6% q/q and +11% y/y. Gaming revenues, 30% of overall revenue, +16% q/q and -46% y/y. However, the company catered to the buzzy Artificial Intelligence trend, mentioning AI 75 times. F
• Full disclosure, NVDA is a top three holding at Blue Line Capital, our portfolio management company. Check out Bill Baruch on today’s CNBC Halftime Report at 11:00 am CT for more!

• E-mini S&P (March) / E-mini NQ (March)

   

  S&P, yesterday’s close: Settled at 3999.00, down 6.75

  NQ, yesterday’s close: Settled at 12,097.50, up 0.75