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The Market Is Begging for Any Excuse to Rally. Will the Fed Cooperate?

by | Jul 25, 2022 | Market Outlook

We had a bullish week even after Friday’s sell-off, so Senior Strategist Roger Scott and I sat down Monday morning for our new weekly session to discuss all things macro, The Big Picture With Jeff & Roger…

So what’s the “big picture” theme on Wall Street right now?

The market wants to go up and it feels bullish, in my opinion, and is looking for glimmers of hope to ignite a rally. What does Wall Street need to give it that glimmer of hope? 

Cooperation from the Federal Reserve…

The Fed meets this week to announce its latest interest rate target. The market is pricing in a hike of 75 basis points and if that happens, that will put the benchmark rate at 2.25%. The BIG thing the market wants right now is to know that the Fed will stop raising rates around 3%, and not go to 5% or even higher.

So if the Fed says it believes raising rates is starting to work, inflation is getting under control and it doesn’t believe it will have to raise rates too much further… 

We’ll see the market go on a total buying bonanza. Of course, I’m not sure it’s ready to say that because these people have been so, so wrong about everything…

The Big Picture With Jeff & Roger

This is a big, big week for earnings and I’ve noticed that companies have to beat estimates by a considerable margin to get a good-sized rally. 

Goldman Sachs Group Inc. (NYSE: GS), for example, beat earnings-per-share estimates by about 70%, and it had a nice rally. 

So unless sentiment is so negative that any beat is good news, companies can’t just simply con in line or barely beat. And if a company that already lowered guidance misses, then watch out below. We saw that play out when Snap Inc. (NYSE: SNAP) reported on Friday and plummeted 30%. 

 So it’s a precarious position and stocks are likely to get punished on any negative earnings news. 

On top of all the big companies reporting this week, we also have the Federal Reserve’s latest interest rate and gross domestic product news coming — it’s almost too much data to digest in such a short period of time. 

Here are the top companies set to report in a handy little graphic…

We have a lot more to discuss so check out this week’s episode of “The Big Picture With Jeff & Roger” embedded above and let’s dive in!

Are there any topics you’d like to see me cover or questions you’d like answered? Send me an email at jeff@joyofthetrade.com! And be sure to stay ahead of the markets by subscribing to our YouTube channel and our Instagram page for all of the latest!

P.S. [Shocking] We haven’t seen an Exodus like this in years… 

We haven’t seen investors pull their money out of the market at a rate like this in years…

Meanwhile, the Federal Reserve is about to meet and let us know how much it plans to raise interest rates this week.

And while others panic, I’m prepping for some of the biggest overnight turnarounds we’ve ever seen…

Starting with tonight’s overnight trade opportunity! 

And based on what the market internals and global economy are showing right now…

I believe we’re just at the beginning of a… 

Another Massive Overnight Opportunity! 

WRITTEN BY<br>Jeff Zananiri

Jeff Zananiri

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