Traders Still See Another Quarter-Point Fed Rate Cut by Year-End

Video commentary for September 18th 2019

Eoin Treacy’s view

A link to today’s video commentary is posted in the Subscriber’s Area. 

Some of the topics discussed include: Fed cuts rates and needs to inflate it balance sheet to ensure orderly markets. Wall Street steady, oil eases, gold pauses, crypto’s inert range will not last indefinitely, Dollar firm.

Traders Still See Another Quarter-Point Fed Rate Cut by Year-End

This article by Emily Barrett for Bloomberg may be of interest to subscribers. Here is a section:

Futures traders still see about another quarter-point of easing from the Federal Reserve this year, after the central bank cut rates on Wednesday and said it will “act as appropriate” to sustain the economic expansion.

The rate on the January 2020 fed funds futures contract was about 1.63% after the central bank’s announcement. The dot plot accompanying the statement shows policy makers’ median projections are for interest rates to remain on hold this year and next, but the balance of views has shifted more dovishly.

Judging by this level, traders still expect one more cut in either of the Fed’s two remaining decisions this year — on Oct. 30 and Dec. 11. This estimate of the market’s pricing assumes that the effective funds rate moves toward the middle of the Fed’s new target range of 1.75% to 2%.

Eoin Treacy’s view

The Fed’s balance sheet is belatedly started to expand once more as the liquidity demands of the economy and Treasury market pressure the central bank to provide the funds necessary to ensure an orderly market. That is the most basic requirement for central banks, but the requirement has been exaggerated by the shrinking of investment and commercial bank balance sheets over the last decade. That suggests even without quantitative easing there is a clear need for the Fed to expand its balance sheet.
 

Ethereum, XRP, and Litecoin Lead Alt Season 2.0

This article from dailybitcoinnews.com may be of interest to subscribers. Here is a section:

But as the saying goes, this time may be different. Altcoins are bouncing from long-term support, and the rallies are showing exceptional strength, and are even continuing to rally while Bitcoin struggles with overhead resistance – something not seen for much of 2019.

Ethereum has been leading the charge, with as much as 20% growth. XRP , one of the worst-performing crypto assets of 2019, has also gained around 20% even as sentiment surrounding the altcoin hits an all-time low.  EOS and Dash are also up by a similar margin.

Litecoin, Cardano, Tron, Tezos and IOTA, and others from the top 20 crypto assets by market cap are also up by about 10% or more. Stellar, which has plummeted further and further throughout the bear market spiked by 40%.

The boom in altcoins is due to extremely oversold conditions, and a breakdown in Bitcoin dominance – a metric that weights the king of crypto against the rest of the market. But depending on the type of formation that BTC dominance is in, it could spike back up, wiping out any gains altcoins have seen during this rally.

Eoin Treacy’s view

Historically, when silver rallied it was a good lead indicator for what one might expect from gold. That did not prove the case on this occasion not least because there was such widespread disillusionment with the precious metals sector. Gold rallied first and silver played catchup. In the cryptocurrency markets bitcoin has tended to be the go-to market. When it rallies impressively, speculation on which alt-coin will play catchup tends to stoke demand for the smaller markets. The opposite appears to be happening on this occasion.

FedEx Plunges After Slashing Forecast on Trade War, Slowdown

This article by Thomas Black for Bloomberg may be of interest to subscribers. Here is a section:

“In reality, FedEx’s release is largely the result of many management missteps over the years, including overspending on aircraft despite weaker returns in Express over the long-term, and acquisition debacles,” he said in note to investors.

Trade-War Impact
The U.S.-China trade war has weighed on manufacturers, disrupting a key market for FedEx. A surge in industrial jobs seen in the first two years of Trump’s presidency has reversed in parts of the country, and there’s evidence that some corners of the U.S. economy are sliding toward recession. Companies have slowed business investment and capital expenditures as uncertainty over trade policies has clouded the outlook for future growth.

For FedEx, the weaker outlook underscored the hurdles as the company introduces costly changes to its ground network to handle surging e-commerce deliveries while contending with rising competition from Amazon.

Eoin Treacy’s view

Amazon is now a larger shipper of items than either UPS or Fedex within the US market, from a standing start a couple of year ago. UPS still ships items for Amazon but that business is declining while Fedex is attempting to forge relationships with upstarts in the warehousing sector like Deliverr and Shopify. If the share price is any guide that latter strategy is in its infancy at best. Meanwhile it has been my experience that Fedex is successfully. competing on price for international bulk shipping business to Amazon’s European warehouses.

Eoin’s personal portfolio precious metal trading position profit taken September 5th 2019

Eoin Treacy’s view

One of the most commonly asked questions by subscribers is how to find details of my open traders. In an effort to make it easier I will simply repost the latest summary daily until there is a change. I’ll change the title to the date of publication of new details so you will know when the information was provided. 

2019: The 50th year of The Chart Seminar

Eoin Treacy’s view

The London Philharmonic Orchestra is holding a concert in David’s memory on October 5th October at the Royal Festival Hall. There is a reception between 5.30 and 6.45 in the Foyle Pavilion, Level 3, Green Side and subscribers are well to join David’s family there for light refreshments. Following the reception, we will move to the Beecham Bar, Blue Side, Level 5 for a short talk by Tim Walker, Chairman of the LPO. 

If you wish to attend the concert as well, which includes a performance of Elgar’s Cello Concerto by the Young Musician of the Year, it begins at 7.30 and you may book tickets (£67) by telephone on 020 7840 4242 quoting the code Fuller Concert.

Since this is the 50th year of The Chart Seminar we will be conducting the event on October 3rd and 4th to coincide with the memorial on the Saturday.

In the meantime, if you have any questions, would like to attend, or have a suggestion for another venue please feel to reach out to Sarah at [email protected].  

The full rate for The Chart Seminar is £1799 + VAT. (Please note US, Australian and Asian delegates, as non-EU residents are not liable for VAT). Annual subscribers are offered a discounted rate of £850. Anyone booking more than one place can also avail of the £850 rate for the second and subsequent delegates.

Story by ProactiveInvestors