Get Ready For This Week’s Federal Reserve Meeting – Mike Swanson (06/17/2019)

The DOW futures are up 20 points in pre-market action before the open. The stock market should be ok for the next two weeks and that can set the stage for short-term breakouts plays in some stocks consolidating now, but you have to be willing to get out if you play them. With the CAPE ratio for the S&P 500 near 30 this is a stock market for traders and not for people to throw their money into thinking they’ll hold forever with no plan on when to get out.

On Wednesday the Federal Reserve is going to meet and release a FOMC statement. They are unlikely to lower rates at this meeting, but you can expect them to downgrade their forecast for the economy and pave the way for a coming rate cut in July.

The stock market isn’t showing it now, but there are signs that the global economy is slowing down and a high probability that another round of Trump tariffs will hit in July to make a slowdown a certainty.

This is why the Fed Fund futures are now pricing in an over 90% chance of a cut in July.

But the Fed has to pave the way for that first – and wait for the possibility of a trade deal at the end of the month G-20 meeting.

According to a CNBC article on this meeting, “economists expect the Fed to tilt its message toward lower rates, with officials lowering their interest rate forecasts in the so-called ‘dot plot,’ a chart that anonymously reflects each Fed official’s rate forecast. They are also expected to reduce their outlook for economic growth, and acknowledge weaker inflation. “

We have seen a massive front-running in the corporate bond market too of dovish Fed action and even potential QE style bond buying programs.

Take a look at the LQD high-grade corporate bond ETF for example.

When bond prices rise the yields they pay go down.

There is a mega shift starting to take place into “safe havens” causing things such as LQD to go straight up to new highs while stocks like AAPL, NVDA, and FB merely bounce.

Of course, gold has already been rallying for the past six weeks without anyone paying any attention to it back up to its long-term $1350 resistance level. The action in the bond market has been telling us that rate cuts are coming and an inverted yield curve boosts gold prices.

The masses right now have no money in precious metals and zero interest in mining stocks. We’re simply in stage one (the stealth stage) of what will be a three-stage gold rally as I explained in this video yesterday:

http://wallstreetwindow.com/2019/06/how-much-gold-do-american-millionaire-investors-own-in-their-accounts-mike-swanson-06-16-2019/

Once stage two begins technical buyers will come in and in time the masses will begin to chase. Getting ahead of them is how big money is made in the market and generates rallies that can last for months and sometimes years on end and not just a few days.

To be a part of that grab my Total Gold Trading Program. Now available here:

http://wallstreetwindow.com/beta/totalgoldtradingprogramlaunch1400.htm

-Mike