Stocks are losing ground as traders cut their risks ahead of tomorrow's Fed decision.
On May 2, U.S. reported that JOLTs Job Openings declined from 9.97 million in February to 9.59 million in March, compared to analyst consensus of 9.78 million. The report showed that Fed’s rate hikes have already put material pressure on the job market.
The FedWatch Tool indicates that there is a 96.8% probability of a 25 bps rate hike at tomorrow’s meeting. The JOLTs Job Openings report should not have a material impact on the near-term Fed policy outlook as the absolute majority of traders believe that Fed will raise the federal funds rate to 500 – 525 bps.
Today, traders also had a chance to take a look at the Factory Orders report for March. The report showed that Factory Orders increased by 0.9% month-over-month, compared to analyst consensus of 1.1%.
SP500 found tiself under pressure and moved towards the 4130 level as JOLTs Job Openings and Factory Orders reports missed analyst expectations. Traders are worried about the slowdown of the economy and stay cautious ahead of tomorrow’s Fed decision.
U.S. Dollar Index pulled back from session highs as Treasury yields declined. Traders expect that Fed will be forced to cut rates in the second half of the year.
Gold moved closer to the $2000 level, supported by lower Treasury yields.
For a look at all of today’s economic events, check out our economic calendar.
Vladimir is an independent trader and analyst with over 10 years of experience in the financial markets. He is a specialist in stocks, futures, Forex, indices, and commodities areas using long-term positional trading and swing trading.