Will keep it short today, as it is fairly simple - THIS WILL BE THE MOST IMPORTANT WEEK OF THE SUMMER!
I think there is no question about it and some of you were waiting for it for a while.
FOMC MEETING - 27th (Wed)
Another FED meeting deciding on monetary policy, how to tackle inflation without pushing US into recession (at least what J Powell is always trying to tell us, though I think they are aware recession is most likely already here). Everyone expect a 75pts hike with 80% probability as seen on CMC, though shortly after CPI numbers were released earlier this month it was showing 50/50 with 100pts interest rates increase, until one of the FED members poured some cold water on it, saying markets are getting ahead of themselves. That plus earnings not as bad as some experts initially thought caused a continuation of rally in stock market and in turn crypto.
As in June, market already expects another 75pts hike and if they stick with it, we should see very little price reaction, unless they decided to go with 100pts which is not out of the question, considering how rampant inflation is in US.
What will be key as usual is the press conference after, I am expecting more hawkish tone than even before, without expected by some hint of FED pivoting in September and if they only bump int rates by 75pts and CPI prints an aggressive number in August I’d not rule out an emergency meeting shortly after rather than waiting for 21st of Sept.
As always best not to trade or buy around the time of announcements as volatility is to be expected, for regular long term buyers just wait till Friday. Read on to find out why.
US GDP Q2 - 28th (Thu)
Even if there will be no drama after FOMC meeting, next in line is GDP for Q2. Considering previous quarter had a -1.6% print, if this one surprises with negative result it will be a clear signal recession is hear and I think you might stop seeing “key” people in US gov saying it won’t happen.
I could not find a steady consensus today as FXstreet shows 0.9% as expected but Investing.com calendar 0.4%, either way as mentioned above just check in case its a negative reading, then piled with possible hawkish FOMC meeting, sea of red on risk on assets will flood fast.
PCE on 29th (Fri) and Earnings - all week
As mentioned last month PCE is what FED is paying attention to, even though markets might be a bit less than CPI and PCE been going lower for a number of months now. Reading for June is expected to slow down and be same as previously so 4.7% on Core YoY, with MoM rising to 0.5%.
On top of all the above we will have majority of company earnings announcements throughout the week with some key ones listed below:
MSFT, GOOG, V, KO on Tuesday after market close
META, QCOM, TMUS, BA on Wednesday
AAPL, AMZN, MA, PFE, INTC on Thursday
XOM, PG, AZN, CVX on Friday before market opens
You could all see how Tesla’s earnings impacted Nasdaq last week, so no wonder such concentration of large cap companies announcing theirs will have a big impact on top of all the other key economic news.
Conclusions
You already know my take on what is more likely for a while, as TA and most of on-chain data still favors at least one more bearish movement on both equity and crypto markets, especially that many crypto influencers called the last lows a definite bottom and are awaiting FED pivoting.
We can also see a dangerous pattern of a mini “alt-season”, situation where Bitcoin dominance is dropping and smaller cap digital assets are being bought instead, mainly because of greed and everyone thinking they can score a 1000x outsmarting the market instead of buying safer asset like BTC, that even if it falls in price it won’t be as painful as altcoins. On top of that a higher interest in ETH remains and it refused to drop with Bitcoin over the weekend, with many still betting on the merge happening in September and markets not tanking before that.
As I write this Bitcoin’s weekly candle closed yet again under 200WMA, which some influencers were hoping won’t happen as they could use it to create more hype and shill some altcoins in hope for more bullish moves. Of course central bankers don’t care about BTC’s weekly close so while from TA side it is a bearish sign that we closed below, it can still explode to the upside without looking back if all macro data is bullish this week.
No matter what happens on Wednesday unless clearly bearish/bullish (I will post on Twitter if something decisive is announced by JP and his buddies) for regular investors its best to wait till Friday with any decisions on purchases.
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