Equities report: FOMC minutes in sight

Since the start of the week all three major indexes have moved lower at the time of this report. We are to review the upcoming release of the FOMC’s July meeting minutes, the recent announcements in regards to Intel and the Jackson Hole Symposium, and are to conclude the report with a technical analysis of S&P 500’s daily chart.

FOMC minutes due out today

The FOMC’s last meeting minutes are set to be released during today’s American session. The Fed’s last meeting minutes may garner attention from market participants, considering the dissenting votes from two board Governors, marking the first time since 1993 that such a scenario occurred.Hence, market participants may be looking to identify if other policymakers had considered dissenting or if the Fed may be preparing for a rate cut in the near future. In turn, should such a scenario play out following the release of the minutes, it may be perceived as dovish in nature which in turn could aid the US Equities markets. However, should the minutes showcase that the majority of policymakers are committed to keeping interest rates steady for the time being, it may be perceived as hawkish in a nature and could potentially weigh on the US Equities markets.

US Government to back Intel (#INTC)

The White House has apparently confirmed that the Government is considering acquiring a stake in Intel (#INTC) the struggling chipmaker. Per Reuters “ U.S. Commerce Secretary Howard Lutnick is looking into the government taking equity stakes in Intel (INTC), opens new tab and other chipmakers in exchange for grants under the CHIPS Act, which aims to spur factory-building in the U.S”. Furthermore, per the same report, the possible stake may be 10%. Overall, the new’s that the US Government is considering taking in a possible stake in Intel (#INTC) may have been a primary cause behind the recent increase in the company’s stock price. In our opinion, Intel is set to greatly benefit from the Trump administration for the remainder of his presidency, given their status as a US company that has wafer fabrication facilities in the US and fits the Government’s made in America narrative. Moreover, SoftBank earlier on this week announced it’s intentions to invest roughly $2 billion in Intel, which may have further increased market optimism in Intel and may have thus aided the company’s stock price. In conclusion, the recent announcements this week may have aided the company’s stock price and may continue to do so should further positive announcements be made.

Jackson Hole Symposium this week

The annual Jackson Hole Symposium hosted by the Kansas City Federal Reserve is occurring this week and of particular interest will be Fed Chair Powell’s speech on Friday. The speech by the Fed Chair may be significant in nature as he is expected to discuss on the US’s economic outlook and the central bank’s policy framework and should it be perceived as dovish in nature, it may aid the US Equities markets and vice versa. However, considering the recent attacks on the Fed Chair by the US President and in particular the comments made yesterday by the US President that “Could somebody please inform Jerome “Too Late” Powell that he is hurting the Housing Industry, very badly? People can’t get a Mortgage because of him. There is no Inflation, and every sign is pointing to a major Rate Cut. “Too Late” is a disaster!”, the pressure may be mounting on the Fed to cut rates. Moreover, adding to the pressure on the Fed was the President’s comment today that Fed Board Governor Lisa Cook should resign following mortgage fraud allegations. Overall, the continued pressure on the Fed may increase volatility in the markets and thus Fed Chair Powell’s speech on Friday may be a high-impact event for the markets.

テクニカル分析

US500 Daily Chart

• Support: 6135 (S1), 5850 (S2), 5580 (S3)
• Resistance: 6467 (R1), 6715 (R2), 7000 (R3)

The US500 appears to have been in the reds for the past few days. We opt for an overall bullish outlook for the index’s price and supporting our case is the upwards moving trendline which was incepted on the 23^rd of May. Moreover, given that the index recently formed a new all-time high figure we are not surprised to see it moving slightly lower the past few days. However, we must note that the RSI indicator below our chart has dipped below 60, implying that the bullish momentum may be fading away and the MACD indicator below our chart tends to showcase bearish market tendencies. Nonetheless, for our bullish outlook to continue we would require the index to remain above the upwards moving trendline in addition to clear break above our 6467 (R1) resistance line with the next possible target for the bulls being the hypothetical 6715 (R2) resistance level. On the other hand, for a sideways bias we would require the index to remain confined between our 6135 (S1) support level and our 6467 (R1) resistance line. Lastly, for a bearish outlook we would require a clear break below our 6135 (S1) support level with the next possible target for the bears being the 5850 (S2) support line.

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