It is very quiet out there Thursday morning as market players do little in front of Fed Chair Jerome Powell's speech Friday at Jackson Hole.
Boeing (BA) , Apple (AAPL) , a few retailers and a couple of other big-cap names are holding up the indices while there is very mixed action in the broader market. Breadth is positive but the number of new 12-month highs has dropped. There just isn't much energy out there.
Probably the biggest reason the market continues to have a positive tone is that too many market players are betting on a negative reaction to what Powell says on Friday. A "sell the news" reaction is logical but that strategy has consistently been a loser on Fed news. Anticipatory bears just can't seem to help themselves.
Currently, the market believes that there is a near certainty of a quarter-point rate cut in September. The odds of a cut in October are around 70% but dropped a bit on the good retail news Wednesday. The bigger question is whether there is a cut in December. Right now, the odds are about even.
The reaction to Powell will depend on how he impacts the odds of a cut in October and December. If confidence increases, we will likely see a positive response, although many market players like to view the Fed as inept or downright incompetent. They view any cuts by the Fed as being a policy mistake. That is what has been the source of most of their navigational problems.
I'm doing very little as the opening gap is starting to be close. I see nothing I'm in a rush to buy with the Fed risk lurking.