What to Watch for this Week
Will the Fed Raise Interest Rates? This is the questions that everyone will be asking this week as the FOMC rate decision is made on Wednesday, Sept. 20. The SP500 closed over the key resistance level of 2500 on Friday. The VIX closed at 10.17 down -19% last week.
On Tuesday, The Census Bureau will release the Housing Starts and Building Permits Report. Last Month, Housing Starts declined 4.8%, and building permits declined 4.1%. The pullback in starts occurred after a strong June Report. Single-Family starts declined .5% from June and will not do much to alleviate supply constraints.
Here are some key viewpoints on the FOMC Decision this week:
- If the Fed quits propping up the market, maybe stocks will get to the “normal” valuation.
- The Fed has been wrong on policy; waiting too long to raise rates and missing the best opportunities. There will be no options when the next recession happens. .
- The deflation from a weak global economy is not ready for a rate hike.
- The FOMC Policy is changing, and the impact will not be as large as in the past.
Ray Dalio spoke with CNBC at the Delivering Alpha Conference last week.
Dalio’s biggest concerns were the following: wealth gap, social conflict, and various financial burdens (debts and pensions).
“I think we’re probably in a 2.5% type of growth environment. I mean, the real question is, to some extent, whether you can unleash the productivity by some of the changes that a pro-business environment can produce.”
Here is Ray Dalio’s TED talk that takes you inside a meeting at Bridgewater.
On the Global Radar
- North Korea and a possible new normal. Look for more missile test, maybe a possible volley of missiles next. U. N. Sanctions are now in full effect.
- Japan and India Team up against China to curd China’s expansion in the region.
- Trump blocks Chinses Investment in LAttice Semiconductor Corp., based on national security.
- Theresa May will give a speech that will unveil a vision of the future for the British relationship with the EU.
Economic Calendar
Last Weeks Numbers
Quote of the Day
“Risk, in other words, is the payment we make for a chance to reach our aspirations.”
(Meir Statman)
