Federal Reserve unlikely to raise rates after disappointing data
A string of disappointing results on the U.S. economy in the past several weeks has all but ensured that interest rates will remain ultra-low for consumers and businesses for another few months. Federal Reserve meet this week to debate when to raise a key short-term U.S. interest rate. The outcome, however, is not expected to be a cliff-hanger. Wall Street investors only see a 15% chance that the Fed will hike rates. After all, the benchmark fed funds rate sits near a modern historic low that ranges from 0.25% to 0.50%. Consumer and corporate loans are sensitive to changes in the fed funds rate. With so many key segments of the U.S. struggling, growth is like to average less than 2% in 2016, even if the economy speeds up in the final four months. The rosier view takes into account a 4.9% unemployment rate, rising incomes and higher household wealth to support the notion that consumers will continue to carry the economy. The past two years has seen the biggest increase in consumer spending since before the recession. Even that bit of good news is not entirely positive. Soaring rents and higher health-care costs are taking a bigger bite out of household incomes, according to an index that tracks the cost of living.
What we have here now, three well-known name’s hesitating on the resistance point to take a down-ride with the industry’s in the U.S. equity market’s.
Previous close: 36.56
Trading above the SMA-50
52-week high : 2.87%
Shares tested above $38 on Friday, incredibility returning to levels not seen since 2000. That’s a 16-year round trip, and a reminder why buy-and-hold isn’t always a good idea.
Investors are encouraged by positive signs from the PC market as well as the company’s iPhone supplier wins. That led management to raise its Q3 revenue and gross margin guidance.
The company will next report results on Oct. 18 after the close. Analysts are looking for earnings of 66 cents per share on revenues of $14.9 billion.
Previous close: 115.57
Shares tested above $116 on Friday for the first time since late 2015 as the iPhone 7 goes on sale and investors look for the company to benefit from Samsung’s disastrous recall of its Galaxy Note 7 for exploding batteries (with the official advice from the company and the U.S. government to switch the phones off and leave them off). As for the iPhone 7, initial demand doesn’t seem as bad thanks to aggressive carrier discounts and offers.
The company will next report results on Oct. 25 after the bell. Analysts are looking for earnings of $1.65 per share on revenues of $46.7 billion.
Previous close: 128.35
Trading above the SMA-50
Facebook Inc has been enjoying a nearly unbroken uptrend since 2013 thanks to solid user growth, steady ad revenue and excitement about new initiatives like key mergers and acquisitions deals and its push into virtual reality with Oculus. The company is making a move into mobile payments as well, confirming on Sept. 12 that it will integrate this feature into the next version of its Messenger platform. The company will next report results on Nov. 2 after the bell. Analysts are looking for earnings of 96 cents per share on revenues of $6.9 billion.
Even that bit of good news is not entirely positive. When debt is cheap, equities are expensive.
J. Mason ♦