Tuesday 11 June 2024

Will the U.S. Be out of Step on Rates?

Canada and Europe just cut
 
   
     
   
 
JUNE 11, 2024
   
PROSPERITY PUB MARKET TALK
Will the U.S. Be out of Step on Rates?
 

Big news on the horizon: tomorrow, the Federal Reserve wraps up its meeting and we’ll finally get the scoop on what’s happening with interest rates.

There's a lot of buzz about this, and for good reason.

Wall Street's been on a rollercoaster, and this year started with the market expecting as many as 6 rate cuts. 

But inflation’s been stubborn, and the U.S. economy has  been showing some serious muscle, making a rate cut far more difficult for the Fed to justify.

So, what’s the big deal?

Well, for starters, the Bank of Canada and the European Central Bank have just completed their first rate cut.

If the Fed cuts rates, it’ll sync up with other central banks like the ECB, potentially smoothing out global markets and giving economies a little boost. 

But if the Fed decides to keep rates steady, or even hike them, things could get wild.

Higher US rates would attract a ton of foreign cash into our markets, driving up asset prices and making it even harder for the Fed to fight inflation.

But it’s not just about what might happen in the U.S. A rate hike here could mean trouble abroad.

Countries with lower rates might see their currencies weaken, making it tough to import goods and keep their economies humming. Europe, in particular, could feel the squeeze.

We’re in for an interesting ride, folks. Stay tuned for tomorrow’s Fed announcement Stay tuned for what’s sure to be an impactful decision!

— The Prosperity Pub Team

 
 
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SCOTT WELSH’S TICKER TALES
Time for TV? (OLED)
 

TVs aren’t the hot status item they were years ago, but we all still have them.

And companies are still providing the parts for them.

OLED (Universal Display Corp.) is one of those companies. It basically makes the parts that make the lighting on our flat-screen TVs.

While the sector hasn’t been setting anything on fire, OLED is surging toward a possible breakout.

Here’s the chart:

 
 

If it breaks above $194.84, it could make a nice move.

We’ll keep an eye on it.

Happy trading,
— Scott Welsh

P.S. As a reminder, these plays are based on my longer-term Weinstein Stage Analysis method. The charts above use weekly candles and a 30 week simple moving average. For details on this method, see my explanation on this Ask The Pros episode starting at timestamp 20:45.
   
 

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