Market Update Into September 16th: It's The Final Countdown (To FOMC)

3 mins read

Last week, September’s historical weakness seemed to be in full effect, with major indexes slipping 4-6%. However, the market has a way of defying expectations, especially when consensus leans too heavily in one direction. This week, we saw a sharp reversal, with indexes reclaiming most, if not all, of last week’s losses. The catalyst? A cooler-than-expected CPI report that boosted the odds of a 50 bps rate cut. As traders gear up for next week’s pivotal FOMC meeting, the market’s next move could be a powerful one. In other news;

Next week’s rate decision all but guarantees heightened volatility, and the way the indexes are setting up now suggests fireworks are likely. Let’s dive into the charts to get a clearer picture of how the charts are shaping up ahead of what could be a critical week for the markets.

Weekly Analysis

SPY (SPDR S&P 500)

The SPY ETF surged this week, coming within striking distance of August’s high and closing just below the top of the ascending triangle at $562.01 (+3.99%). With the price reclaiming the critical 8/21 EMAs and a bullish MACD cross to end the week, this index looks poised for a powerful upward move in the sessions to come.

QQQ (Invesco QQQ Trust)

This week, the QQQ ETF was the top performer, posting a bullish MACD cross on Thursday and closing at the upper boundary of its symmetrical triangle at $475.34 (+5.94%). While price compression continues within the triangle, the recent bullish signals from both the MACD and the 8/21 EMAs indicate that this index is positioned for a potential breakout, especially with next Wednesday’s FOMC announcement on the horizon.

IWM (iShares Russell 2000)

Similar to its peers, the price action of the IWM ETF continued to contract this week, closing near the top of its symmetrical triangle, just above the 8 and 21 EMAs at $216.83 (+4.29%). However, unlike the other indexes, bullish crosses on the MACD and EMAs have yet to materialize. This cautious price action reflects traders’ sensitivity to next week’s FOMC decision, given the outsized impact rate changes have on small caps.

Earnings

Notable Results

ORCL (Oracle)

EPS: $1.39 vs $1.32 est
SALES: $13.31B vs $13.23B est

ADBE (Adobe)

EPS: $4.65 vs $4.53 est
SALES: $5.41B vs $5.37B est

GME (Gamestop)

EPS: $0.04 vs $(0.01) est
SALES: $789.00M vs $895.67M est

KR (Kroger Company)

EPS: $0.93 vs $0.91 est
SALES: $33.91B vs $34.09B est

PLAY (Dave & Buster’s Entertainment)

EPS: $1.12 vs $0.84 est
SALES: $557.10M vs $560.65M est

RH (Restoration Hardware)

EPS: $1.69 vs $1.56 est
SALES: $829.65M vs $824.52M est

CMA (Comerica)

EPS: $1.53 vs $1.19 est
SALES: $824.00M vs $813.47M est

MANU (Manchester United)

EPS: $(0.20) vs $(0.17) est
SALES: $179.43M vs $189.09M est

WOOF (Petco)

EPS: $(0.02) vs $(0.02)
SALES: 1.52B vs 1.52B

RBRK (Rubrik, Inc.)

EPS: $(0.40) vs $(0.49)
SALES: $204.95M vs $196.21M

ASO (Academy Sports)

EPS: $2.03 vs $2.03
SALES: $1.55B vs $1.57B

SIG (Signet Jewlers)

EPS: $1.25 vs $1.14
SALES: $1.49B vs $1.50B

OXM (Oxford Industries)

EPS: $2.77 vs $3.00
SALES: $419.89M vs $438.18M

CAL (Caleres, Inc.)

EPS: $0.85 vs $1.22
SALES: $683.32M vs $723.80M

AVO (Mission Produce)

EPS: $0.23 vs $0.02
SALES: $324.00M vs $230.95M

What’s Happening Now

QQQ (Nasdaq 100)

Next week poses a historically tough challenge for QQQ, tied for its lowest weekly win rate over the past two decades. Meanwhile, markets are gearing up for a potential policy shift as the Fed prepares for its first rate cut since the hiking cycle began in March 2022. Expectations are slowly shifting toward a more aggressive 50bps cut, up from the anticipated 25bps, with the decision set for September 18.

This is an image of QQQ's weekly seasonality chart.

ORCL (Oracle)

Oracle surged over 13.67% this week after receiving nine analyst buy ratings following strong Q1 results. The company reported $1.39 EPS and $13.31 billion in revenue, up 7% year-over-year. A 21% jump in cloud services fueled growth, and a new multi-cloud partnership with AWS, allowing direct access to Oracle databases added to analyst optimism.

This is an image of this week's analyst upgrades for ORCL.

DELL (Dell Technologies)

Dell is preparing for its inclusion in the S&P 500 on September 23, alongside Palantir and Erie Indemnity, which typically drives increased trading volume and heightened liquidity. However, despite this bullish catalyst, Dell’s founder and CEO, Michael Dell, has resumed selling shares, offloading over $360 million worth of stock this month after a three-month pause. It begs the question, are investors missing something?

This is an image of Michael Dell's recent sells.

Believe it or not, this is just a fraction of what happened in the markets this week. For a full run down delivered straight to your inbox every weekend, sign up for The Official Trendspider Newsletter!