Markets open the trading day on Wednesday at fresh all-time highs. The S&P 500 (SPY) erased losses yesterday to close at 5,178.51. At 2 p.m., the Federal Reserve’s Open Market Committee will announce its monetary policy. Markets, which priced in rate cuts of 25 bps, widely expect no rate cuts. This contradiction between expectations and forward stock pricing increases the risk of a Fed-led stock correction.
Investors should be wary of holding long-term Treasury bonds. The downtrend in the 20+ Year Treasury Bond (TLT) will continue. Until inflation rates ease, bond prices will fall and yields will rise.
Active traders will watch Nvidia (NVDA) again today. After the keynote address from its CEO, trading volume rose on Monday. The stock is struggling to break out as markets turn their attention to the Fed’s announcement this afternoon.
After the market closed yesterday, Super Micro Computer (SMCI) guided its potential investors on a dilutive 2 million unit share sale at $875. This is lower than its previously marketed range. Goldman Sachs (GS) is the only firm handling the sale. It needs a successful underwriting.
SMCI stock peaked at $1,229, compared to its 52-week low of just $93.19.
In the consumer goods space, Unilever (UL) is an attractive buy. The firm will cut costs by slashing jobs. It plans to spin off its ice cream unit, which holds brands such as Ben & Jerry’s.
