The stock market will open for trading at 9:30 a.m. ET, but it won't be until 2:00 p.m. ET, or maybe even 2:30 p.m. ET, that it opens up to share its real feelings. That's because those times mark when the FOMC will release its latest policy directive and when Fed Chair Powell will discuss the FOMC's decision at his press conference.
The consensus view is that the FOMC will vote to leave the target range for the fed funds rate unchanged at 2.25-2.50%, that Fed Chair Powell will reiterate an inclination to maintain a patient mindset, and that the so-called "dot plot" will show a reduction in the median estimate of rate hikes projected for 2019 (the median estimate provided in December stood at two rate hikes).
Separately, there have been some rumors that the Fed might announce a timetable for ending its balance sheet runoff, although that is not considered a given at this meeting. It's more of a hope.
It won't be a disappointment if the Fed simply suggests an announcement on the timing for ending the balance sheet runoff will be coming soon since market participants generally expect the runoff to end by the end of the year.
So, tick-tock... the wait is on.
In the interim, the market is occupying itself with some corporate news that has exposed some of the concerns about a slowdown in global growth.
- FedEx (FDX) fell short of fiscal third quarter earnings estimates and lowered its FY19 EPS guidance below consensus, calling attention to slowing international macroeconomic conditions and weaker global trade growth trends.
- BMW (BMWYY) reported a 12.4% yr/yr decline in its FY18 net profit and a 1.1% decline in revenues and warned its FY19 earnings will be well below last year's results.
- The CEO of UBS (UBS) told conference attendees, according to Bloomberg, that the first quarter was one of the worst environments in recent years.
These revelations have stunted global equity markets somewhat, yet they aren't necessarily surprising in light of what global equity markets already knew about slowing global growth trends.
Accordingly, the fallout has been relatively modest, partly because monetary policy has been resolutely dovish and partly because there is an emerging hope the global economy, and corporate earnings growth, is close to bottoming.
The futures for the major indices are all little changed at the moment and are trading in close proximity to fair value. That should translate into a mixed, and flattish, open before things open up in the afternoon following the FOMC announcement.