Market action is often slow in front of Fed interest-rate decisions and that is the case Wednesday. Breadth is about dead even and the indices are mixed, with the DJIA showing a little relative strength. There aren't any major trading themes right now, but it is interesting to see a slight bounce in bonds.
A quarter-point interest-rate hike is well anticipated Wednesday but the real key will be comments from Fed Chair Jerome Powell, who has lately been sounding more hawkish.
Inflation is starting to move higher but still is well-contained. The important thing is that economic growth is so strong that it can handle higher rates. Not only is there record low unemployment, the Atlanta Fed is predicting GDP growth of 4.4%. While Powell is likely to sound increasingly hawkish, the U.S. market can handle it. Emerging markets may struggle with it but that isn't a reason for the Fed to back off.
I'm not doing too much in front of the Fed announcement. I've added to stodgy big-cap Eli Lilly (LLY) , which has a great base. The stock recently received an overweight rating and a $117 target from J.P. Morgan. Sarepta Therapeutics (SRPT) , which is a much more interesting stock, continues to ramp up and I'm holding on tight.
On Tuesday Intelsat S.A. (I) made a big move and it is seeing some follow through Wednesday. I've cut that back a bit into the strength. A small biotech of interest is Aurinia Pharmaceuticals (AUPH) . It is coming out of a base on good volume and may be able to generate a little momentum.
A Senate hearing on data privacy is about to begin with testimony from Apple (AAPL) Amazon (AMZN) , Twitter (TWTR) and several others. Probably the most interesting thing here will be the comments from Alphabet (GOOGL) management, who skipped the last meeting and earned some scorn from politicians.
Alphabet management will admit that it made mistakes, but there is a good amount of skepticism from Republicans about the company.
Alphabet stock bounced the last couple days but is down slightly Wednesday morning. It is likely that traders are remembering what Facebook FB did when Mark Zuckerberg testified before Congress. While there were mixed reviews of his performance the stock made a big run that lasted a couple weeks into its earnings report.
The setup for Alphabet is not as good, though. There isn't any good trade here at the moment but unless Alphabet management really blunders the stock is probably a buy on weakness.