It happens every time–markets barely moved prior to any Fed Funds rate cut (or a hike) and this time is no different–equity and bonds markets are barely moving–less than a 1/10% in the stock market indexes.
The 10 year treasury has moved a bit more than stocks as yields are off 2 basis points to 1.81%. This is after a first read on 3rd quarter GDP of 1.9%–seems like a Goldilocks number to me–not too hot, not too cold. Is it a number that warrants a Fed Funds rate cut? I don’t really think so–BUT they will cut–the tail is wagging the dog and the markets are ‘demanding‘ a rate cut. If the FED doesn’t cut rates there will likely be some real fireworks this afternoon.
ADP has just reported (for what it is worth) 125,000 new jobs in October–this also seems to be a Goldilocks number. For the official government jobs report on Friday the median forecast is for 75,000 jobs and this is the number markets tend to focus on (versus ADP).
So we watch and wait–we seldom, if ever, react to rate cuts etc. As individual investors there is little use in thinking you can make a investment decision that is going to beneficial based on events like this. In the ‘olden days’ (or 10 years ago) I thought I was smarter than the market many times–I wasn’t and I don’t remember ever helping myself by buying or selling prior to ‘news’.