So here we are again waiting for any signal from Janet Yellen and Co as to the future path of US interest rates. The FOMC meets today and tomorrow with an announcement 7pm London time tomorrow with no Yellen press conference in the diary and no revised economic projections scheduled.
A survey on Bloomberg has none of the 91 economists that took part looking for any change, however, the wording of the announcement will be keenly awaited with the inclusion of the statement that the risks were “nearly balanced” opening the door for a June hike.
After omitting the “balance of risks “ statement from the January and March meetings as financial markets struggled with the economic outlook the committee's language is thought to be the most important item this week.
The S&P 500 is now up 2% for the year having had a difficult first two months and the earnings season is well and truly upon us with 138 of the 500 constituent members having reported. 104 have beaten consensus estimates of Earnings Per Share (EPS) by a weighted average of around 2.6% but according to Deutsche Bank analysts expectations for EPS have been cut by 9.4% since January. Indeed, earnings are down high single digits relative to last year’s results as indicated by expectations for Apple’s second quarter results with its EPS expected today at $1.98, 17% lower than expectations in January.