Welcome to the biggest week for the economy in 2024 (so far). The week is off to a muted start compared to all the volatility we’re expecting to see for the rest of the week. Let’s break down why:
First, oil prices are calming down after they spiked over the weekend thanks to tensions in the Middle East ramping up even more thanks to a drone strike that killed 3 U.S. servicemembers in Jordan and injured dozens more. The response to that strike appears to be more measured than folks initially feared—but the conflict in the Middle East appears to be approaching a boiling point.
At the same time—all investor attention is squarely focused on Jerome Powell this week thanks to the FOMC meeting on Wednesday. This whole rally hinges on when interest rate cuts will actually happen—and the Fed could easily throw cold water on the entire market.
With most of the world’s biggest companies reporting earnings within 48 hours of that FOMC rate decision, expect a lot of huge swings in the market as we get a true sense of what 2024 has in store for us.
But for now, let’s examine the big stories that are breaking right now in the prelude to all that market activity.
Essentially, a mixed-bag Friday is forcing this market to hold its collective breath ahead of the biggest news cycle of the quarter next week. 5 of the top 10 biggest companies on earth will report their earnings within a single 48-hour period while Jerome Powell will also give the market a critical outlook for how rates will behave this year. If there’s going to be a period where the market overreacts to absolutely everything—it’s going to be next Wednesday and Thursday.
So, let’s take an even-keeled look at the big stories powering this equilibrium today so we can have a more measured response once the price action hits overdrive to end the month.