Federal Reserve Chair Jerome Powell’s Testimony: What it Means for Your Stocks Today

Good morning,

U.S. stock index futures edged lower on Wednesday in cautious trading ahead of Federal Reserve Chairman Jerome Powell’s congressional testimony.

Powell is due to deliver his semiannual monetary policy testimony at 10 a.m. ET, which will be scrutinized for clues on how long the central bank will keep its restrictive policy in place. Investors will also monitor other Fed policymakers including Cleveland Fed’s Loretta Mester and Chicago Fed’s Austan Goolsbee later in the day for more clues on Fed’s monetary tightening path. Around 72% of market participants expect the Fed to raise rates by 25bps next month.

On the economic data front, housing starts in the U.S. surged 21.7% month-over-month to an annualized rate of 1.631 million in May. Building permits rose by 5.2% to an annual rate of 1.491 million in May.

The CNN Money Fear and Greed index showed further decline in overall sentiment among U.S. investors on Tuesday. At a current reading of 79.0, the index remained in the “Extreme Greed” zone, versus a previous reading of 82.0.

WTI crude futures traded near $71 per barrel. Gold held below $1,940 an ounce while the yield on the US 10-year Treasury note is around 3.73%.

In regular trading on Tuesday, the Dow fell 0.72%, the S&P 500 lost 0.47% and the Nasdaq Composite shed 0.16%. Ten out of the 11 S&P sectors finished lower, led to the downside by energy, materials and utilities.

On the Platinum Channel we continue to watch KO which once again closed above the 200-day SMA, however the RSI slipped below the 50 level.

Have a great day.