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Now that the retail sales numbers are out, we've got a little more insight into the current economic picture.
Core retail sales, which exclude auto sales, came in below expectations at 0.1%, while retail sales overall beat expectations, rising to 0.1% instead of the expected decline.
It seems that with interest rates falling the past couple of months, folks were more inclined to buy cars rather than other goods. But keep in mind, this is typically a slow season for retail sales before we get into the holiday rush.
So, what does all this mean as we inch closer to the Fed's decision tomorrow?
In my mind, these numbers add another layer to the market's puzzle. The stronger auto sales indicate that while high interest rates are affecting certain spending areas, they aren't slamming the brakes on all consumer activity.
But how much does this data sway the Fed's hand when it comes to tomorrow’s rate announcement? That’s where things get interesting.
Interest Rate Speculation: All Eyes on the Fed
The market is buzzing with speculation about what the Fed will do. Most of the market believes a rate cut is on the horizon, especially after the European Central Bank’s recent rate cut.
The logic is simple: if other central banks are moving to ease economic pressure, it puts the spotlight on the Fed to follow suit.
But, as I said yesterday, the market is holding its breath. We’re at a point where a major catalyst, like the Fed's decision, could push us into a new trend, either upward or downward. The market seems to be in this “wait-and-see” pattern, not committing to a strong direction until the Fed makes its move.
Historically, the Fed's influence on market sentiment can’t be overstated. A rate cut could fuel a market rally, whereas holding steady or hiking rates could trigger a correction.
And this time around, with the backdrop of what many believe to be an already high interest rate environment, the Fed's decision could have even more of a ripple effect than usual. (in reality, we’re right in line with historical average rates)
For now, the volatility is what I’m eyeing. As we saw with the retail sales numbers today, not all data points align perfectly with market expectations. That’s where the opportunity lies.
The market is trying to price in every possible scenario, which creates the kind of volatility that traders like us can use to our advantage.
Yesterday, I talked about this being a prime setup for a volatility play, and I still believe that.
Tomorrow is the day we've been building up to — the Fed’s rate decision.
So, stay sharp and be ready. The market is giving us clues; it’s up to us to piece them together.
— Geof Smith
P.S. Uranium is getting ready to surge! The last time we saw something even remotely close to this happening… Uranium prices surged 1,871%! | | | | |
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