Market Insights

Today’s one of the biggest sessions of the year, with a Federal Reserve meeting and major technology earnings.

Just to get started, here’s a blow-by-blow sequence of what traders can expect on Wednesday, October 30. All times eastern standard:

In the premarket:

• 7 a.m. – Weekly mortgage applications. Not very important.
• 8:15 a.m. – ADP’s private-sector payrolls report. This one’s normally somewhat important, but not today.
• 8:30 a.m. – Gross domestic product for the third quarter. Like ADP, it’s normally a big deal. Today the Fed is a way bigger deal.
• General Electric (GE) also reports earnings in the premarket.

During the trading session:

• 10:30 a.m. – crude-oil inventories. This is important for energy prices, especially because last week’s was the first bullish report in 1-1/2 months.
• 2 p.m. – The Fed’s interest-rate decision, followed 30 minutes later by a press conference. This is a big deal.

After the closing bell:

• Apple (AAPL), the world’s most valuable company, reports earnings. Another big deal.
• Facebook (FB), the world’s largest social-media company, reports earnings.
• Other reports include Starbucks (SBUX), Lyft (LYFT), Western Digital (WDC) and MGM Resorts (MGM).

What to Make of the Fed

CME’s FedWatch tool shows a 97 percent chance that the Fed will cut interest rates 25 basis points this afternoon. So the real story will be future guidance provided in the statement and Jerome Powell’s press conference half an hour later.

The CME’s tool, which uses futures prices to estimate where rates could be down the road, shows little sense of another rate cut. That’s not a surprise because the Fed mostly trimmed rates to match other central banks around the world. Given the solid employment numbers, you wouldn’t normally expect cuts.

The other issue was President Trump’s trade war with China. While the tariffs might have rattled nerves over the summer, they’ve been less of an issue recently. The White House has also signaled it’s moving toward a deal with Beijing.

The Fed’s important because it can impact the kind of stocks investors want to own. In particular, it could fuel the ongoing shift to “value stocks.”

If Powell signals that he’s done cutting rates, that could lift interest rates and make investors more willing to own value stocks like financials. It may also hurt demand for safe havens like utilities, consumer staples and precious metals. And just the opposite could be true if he paints a “dovish” picture by signaling more rate cuts.

A key term could be “mid-cycle adjustment.” For example, he might say “recent rate cuts were a mid-cycle adjustment and now we’re done cutting rates.” Officials may also remove a promise to “act as appropriate to sustain the expansion” by cutting rates.

Apple and Technology Stocks

The AAPL report will be the smart-phone maker’s first set of numbers since breaking out to new highs earlier this month. The big story, as usual, will be iPhone volumes.

After all, CEO Tim Cook announced a cheaper version of the iPhone 11 back on September 10. Few people seemed to care at the time, but pretty soon it became clear that the price cut unlocked a big segment of would-be buyers.

Like the Fed, AAPL impacts other companies — especially semiconductor suppliers for its iPhones. Some key names include Skyworks Solutions (SWKS) and Qorvo (QRVO).

Aside from volumes of iPhones sold, analysts will focus on the growth of AAPL’s services like streaming content. In fact, the company launches its Apple TV+ video service this Friday.

In conclusion, today’s a busy day in the market. Hopefully this post helps you know some of the key things to watch.